Chap 6

A system of cost accumulation where there is an identifiable activity for which costs may be collected. The activity is usually specified in terms of a job of work or a group of tasks contributing to a stage in the production or service process

Prime cost of production is equal to the total od direct materials, direct labour and other direct costs

Comprises indirect materials, indirect labour, and other indirect costs of production

COmprises prime cost plus production overhead cost