Concept:Production cost is the total cost incurred inside the factory to convert raw materials into finished goods.
Explanation:Prime cost includes direct materials, direct labour, and direct expenses.
Factory overheads include indirect materials, indirect labour, and indirect expenses.
Production cost combines both prime cost and factory overheads.
So, production cost
= prime cost
+ factory overheads.
Among the given options, only option B lists both of these components together.
Answer:B. factory overheads and prime cost