Use the following information to answer the given question \(\begin{array}{c|c} & N \\ \hline \text{Opening stock of Raw Materials} & 5,800 \\ \text{Closing...

Answer Details

The prime cost is the total cost of direct materials and direct labor used in producing a product. To calculate the prime cost, we need to add the cost of the raw materials used in production, the direct labor costs and any other direct costs associated with production. From the information given, the opening stock of raw materials is N5,800, the closing stock of raw materials is N4,500, and raw material purchased is N19,000. To calculate the cost of raw materials used in production, we subtract the closing stock of raw materials from the sum of the opening stock of raw materials and raw material purchased. Cost of raw materials used = (Opening stock of raw materials + Raw material purchased) - Closing stock of raw materials = (N5,800 + N19,000) - N4,500 = N20,300 The direct labor cost is N4,000. Therefore, the prime cost is the sum of cost of raw materials used and direct labor cost. Prime cost = Cost of raw materials used + Direct labor cost = N20,300 + N4,000 = N24,300 Hence, the prime cost is N24,300.