N Direct material 2,500 Direct labour 5,000 Direct expenses 1,000 Overhead expenses 1,500 Use the information contained in the table to answer the question ...

Use the information contained in the table to answer the question below.

From the data above, compute the prime cost. 

Answer Details

To compute the prime cost, we need to add the cost of direct materials, direct labour, and direct expenses. Adding the figures for direct materials, direct labour, and direct expenses gives us: 2,500 + 5,000 + 1,000 = 8,500. Therefore, the prime cost of the product is N8,500. The prime cost represents the total cost of direct materials, direct labour, and direct expenses that are directly attributable to the production of a product or service. This cost is essential to know for any manufacturing or production-oriented business, as it is the basis for determining the total cost of production.