Mechanical Engineering - Industrial Engineering and Production Management - Discussion
Discussion Forum : Industrial Engineering and Production Management - Section 1 (Q.No. 8)
8.
Production cost refers to prime cost plus
Discussion:
12 comments Page 2 of 2.
Lucky said:
9 years ago
Product cost refers to the costs used to create a product. These costs include direct labor, direct materials, consumable production supplies, and factory overhead = Product unit cost.
So, option "A" is perfect.
So, option "A" is perfect.
Anmol Bhatia said:
1 decade ago
Prime cost = Direct material cost+Direct labour cost+Direct Expenses.
Factory Cost = Prime Cost+Factory Expenses.
Production Cost = Factory Cost+Administrative expenses.
Total Cost = Production Cost+selling expenses+Distribution Expenses.
Selling Price = Total Cost+Profit.
According to these relations.
Production cost = PRIME COST+ FACTORY EXPENSES+Administrative expenses.
[B] should be correct.
Factory Cost = Prime Cost+Factory Expenses.
Production Cost = Factory Cost+Administrative expenses.
Total Cost = Production Cost+selling expenses+Distribution Expenses.
Selling Price = Total Cost+Profit.
According to these relations.
Production cost = PRIME COST+ FACTORY EXPENSES+Administrative expenses.
[B] should be correct.
(1)
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