prime
works
production
Both A and B
Answer is Right!
Answer is Wrong!
The correct answer is: Both A and B.
Prime cost is the total of direct material cost and direct labor cost. It is the cost of the materials and labor that are directly involved in the production of a product.
Works cost is the total of prime cost and indirect cost. Indirect cost is the cost of production that is not directly involved in the production of a product, such as factory overhead and administrative costs.
Therefore, the total of all direct expenses is known as prime cost and works cost.