Prime cost consists of direct materials combined with:

A) indirect materials.
B) direct labour.
C) cost of goods manufactured.
D) manufacturing overhead.

Prime Cost

The combined cost of direct materials and direct labor that are directly involved in the manufacturing of a product.

Direct Labour

The expenses related to workers who are directly engaged in creating products or services.

Manufacturing Overhead

Covers indirect costs related to the production process, such as factory salaries, utilities, and rent, that are not directly tied to direct labor or materials.