Use the information below to answer questions Direct labour...................₦50 000 Beginning work-in-progress......₦4 000 Raw materials used................
Question 1 Report
Use the information below to answer questions Direct labour...................₦50 000
Beginning work-in-progress......₦4 000
Raw materials used..............₦18 000
Indirect labour.................₦4 000
Ending finished goods...........₦16 000
Ending work-in-progress.........₦9 000
Factory supplies used...........₦7 000
Selling expenses................₦25 000
Beginning finished goods........₦21 000
Other factory overheads.........₦19 000Calculate the prime cost?
Answer Details
Prime cost is the total cost of direct materials and direct labor used in production. To calculate the prime cost, we add the cost of direct labor and the cost of raw materials used.
Direct labor = ₦50,000
Raw materials used = ₦18,000
Prime cost = Direct labor + Raw materials used
Prime cost = ₦50,000 + ₦18,000
Prime cost = ₦68,000
Therefore, the prime cost is ₦68,000.
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