Cost of production, selling & distribution overhead
Factory overhead & administrative overhead
Prime cost & selling and distribution overhead
Prime cost and works cost
Answer is Wrong!
Answer is Right!
The correct answer is: A. Cost of production, selling & distribution overhead.
Cost of production is the total cost of manufacturing a product. It includes direct materials, direct labor, and factory overhead. Selling and distribution overhead are the costs associated with selling and distributing a product. They include sales commissions, advertising, and shipping costs.
Prime cost is the sum of direct materials and direct labor. Works cost is the sum of direct materials, direct labor, and factory overhead.
Therefore, the total cost is the combination of cost of production, selling & distribution overhead.
Here is a brief explanation of each option:
- Option A: Cost of production, selling & distribution overhead. This is the correct answer. Cost of production is the total cost of manufacturing a product. It includes direct materials, direct labor, and factory overhead. Selling and distribution overhead are the costs associated with selling and distributing a product. They include sales commissions, advertising, and shipping costs.
- Option B: Factory overhead & administrative overhead. Factory overhead is the indirect costs of manufacturing a product. It includes costs such as depreciation, insurance, and utilities. Administrative overhead is the indirect costs of running a business. It includes costs such as salaries, rent, and utilities.
- Option C: Prime cost & selling and distribution overhead. Prime cost is the sum of direct materials and direct labor. Selling and distribution overhead are the costs associated with selling and distributing a product. They include sales commissions, advertising, and shipping costs.
- Option D: Prime cost and works cost. Works cost is the sum of direct materials, direct labor, and factory overhead.