Total costs are made up of what components?
Answer is as follows:
Components of Total Cost are : a) Prime Cost
b) Factory Cost
c) Cost of Production
d) Cost of Sales
a.Prime Cost includes: Direct Material, Direct Labour and Direct Expenses.
b. Factory Cost means Prime Cost plus Manufacturing Overheads.
c. Cost of Production means Factory Cost plus Office & Administrative overheads.
d. Cost of Sales means Cost of Production plus Selling & Distribution overheads.
Cost of Sales is Total Cost as it includes all the cost components.
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