Warehouse rent is a part of ________.

Solution (By Examveda Team)

The correct answer is (C) distribution cost.
Let's break down why:
* Prime Cost: This includes the direct materials and direct labor that go directly into making a product. Think of the raw materials and the wages of the workers on the assembly line. Warehouse rent isn't directly part of making the product.
* Factory Cost (or Production Cost): This includes all the costs involved in manufacturing a product *within* the factory. This would include the cost of running the machines, factory supervisor salaries, and factory rent. Warehouse rent for storing finished goods isn't part of this.
* Distribution Cost: This refers to the expenses incurred in getting the finished goods from the factory to the customer. This includes warehousing finished goods, transportation, advertising, and sales salaries. Since the warehouse is used to store finished products before they are sold, the rent falls under distribution.
* Production Cost: This is similar to Factory cost and includes cost of production of Goods in Factory and it does not include rent of finished goods .
Therefore, warehouse rent is most accurately a distribution cost.