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Which of the following best defines Prime Cost?
Prime Cost $= \text{Direct Materials} + \text{Direct Labour} + \text{Direct Expenses}$. It includes all costs that can be directly traced to a product unit — not just materials and labour. Option A is the most accurate because it captures all directly chargeable items. Option B is incomplete (it excludes direct expenses). Option C describes total production cost (including overheads). Option D is vague and incorrect.
Factory data: Budgeted production 10,000 units; Budgeted overheads $50,000; Actual overheads $60,000; Under-absorption $5,000. What was the actual production?
Option A (9,000 units) is correct.
OAR = $50,000 ÷ 10,000 = $5 per unit
Under-absorption = Actual overheads − Absorbed overheads
$5,000 = $60,000 − (Actual units × $5)
Actual units = $55,000 ÷ $5 = 9,000 units
The circumference of circle $C$ is $18\pi$.
Compare:
Column A: The diameter of circle $C$
Column B: $9$
The circumference formula is $C = \pi d$, where $d$ is the diameter.
$18\pi = \pi d \Rightarrow d = 18$
Column A = 18, Column B = 9.
Since $18 > 9$, Column A is greater.
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