JAMB Accounts Principles of Accounts 2010 Paper

Concept: Prime cost is the total of all direct costs incurred in producing goods.Explanation:Direct costs are costs that can be traced directly to a product.They include direct material, direct labour, and direct expenses.Therefore, prime cost is calculated as:Prime cost = Direct material + Direct labour + Direct expenses.Selling, administrative, and production overhead expenses are not part of prime cost.Answer: Option B: direct material + direct labour + direct expenses.