What is prime cost ? Types of overhead?

Question

Accepted Answer

Prime cost is the direct cost of materials and labor required to produce a product. Overhead costs include indirect expenses.

Prime cost includes the cost of raw materials and direct labor.
It does not include indirect expenses like rent, utilities, or administrative costs.
Types of overhead costs include factory overhead, administrative overhead, and selling and distribution overhead.
Factory overhead includes expenses like factory rent, utilities, and maintenance.
Administrative overhead includes expenses like salaries of administrative staff and office supplies.
Selling and distribution overhead includes expenses like advertising, sales commissions, and transportation costs.

Top Royal Autotech Costing Engineer interview questions & answers