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Differntiate between prime cost and factory cost?
Prime cost is a subset of Factory cost. Prime cost consist of Direct material, Direct labour and Direct expenses. Factory cost = Prime cost + Production OH
Is factory rent direct cost?
Yes factory rent is direct cost because without factory there is no possibility for production of units of goods.
Is the cost of goods sold equal to the cost of goods manufactured?
No. Cost of Goods Manufactured includes direct cost and factory over heads plus adjustments for work-in progress. Cost of goods sold includes COGM + factory expenses adjusted for change in stock of finished goods.
Factory rent direct manufacturing costs?
Yes factory rent is direct manufacturing cost because without factory no production can be done so only factory rent is part of direct manufacturing cost and no other rent is included in it.
Define prime cost?
Direct Material Direct Labor direct Factory Overhead
Is electricity a direct or indirect cost?
It depends on various situations, if electricity is utilizing in factory for producing units of product then it is direct cost as much time work continues in factory as much electricity requires, but if it is in office room which has not concern with factory environment then it is not direct cost
Is factory supplies a direct cost?
Factory supplies are those items which used in production but not directly related to production of products that's why not part of direct cost rather indirect cost.
Does prime cost plus conversion cost equal the cost of manufacturing?
Total Manufacturing Cost = Direct Material + Direct Labor + Factory Overheads Prime Cost = Direct material + Direct Labor Conversion Cost = Direct Labor + Factory Overhead So yes prime cost and conversion cost is equal to total manufacturing cost
The three costs in every product are what?
Three Costs included in every product is:1 - Direct Material Cost2 - Direct Labour Cost3 - Factory OverheadsAlso Can be categorized as follows:Prime Cost = Direct material + Direct LabourConversion Cost = Direct Labour + Factory overheads
Two categories of cost comprising conversion cost?
Direct labor and Factory overhead
Prime cost and conversion cost?
Prime cost = direct materials + direct laborwhile conversion cost = direct labor + factory overhead( which includes indirect materials, indirect labor and other indirect costs
Where can you find the cost sheet format of a company and how it finalizes the product cost?
it contain direct material, direct labour, factory over head etc
