In the lecture it is explained that prime cost is the sum of direct materials and direct labor but in the study text provided by Kaplan Publishing it is stated that prime cost is the sum of direct materials, direct labor and DIRECT EXPENSES as well. Kindly help me out why is there a difference in the statements and please let me know the correct one.Thanks.
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7y ago#1The prime cost does include direct expenses (and I do mention this). However in the exam expenses are virtually always indirect.
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