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Put the elements of cost in the order they are built up.

1. Cost of production   2. Prime cost   3. Total cost   4. Works cost

  • A.2, 1, 4, 3
  • B.4, 2, 1, 3
  • C.2, 4, 3, 1
  • D.2, 4, 1, 3

Answer: D

Direct costs give the prime cost, factory overhead gives the works cost, administration gives the cost of production, and selling and distribution give the total cost. Adding the profit to that total yields the selling price.

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