Given: Direct material ₦2,500 Direct labour ₦5,000 Direct expenses ₦1,000 Overhead expenses ₦1,500From the data above, compute the prime cost?

Answer Details

The prime cost is the total cost of direct materials, direct labor, and direct expenses that are required to produce a product or service. In this case, we are given the following costs: Direct material = ₦2,500 Direct labour = ₦5,000 Direct expenses = ₦1,000 To calculate the prime cost, we simply add up these costs: Prime Cost = Direct Material + Direct Labour + Direct Expenses Plugging in the numbers from the question, we get: Prime Cost = ₦2,500 + ₦5,000 + ₦1,000 Prime Cost = ₦8,500 Therefore, the answer is ₦8,500. In simpler terms, the prime cost is the total cost of the raw materials, labor, and other expenses that are directly involved in the production of a product or service, before overhead expenses are added.