Question

Given the following info, calculate total prime cost

Direct materials - $58,000
Direct labor - $40,000
Manufacturing overhead- $27,000
Selling expenses- $19,000
Administrative expenses - $50,000

Answer 1

The total prime cost is $125,000.

Step-by-step explanation:

The term 'prime cost' refers to the direct costs involved in the production of goods or services. It includes the cost of direct materials, direct labor, and manufacturing overhead. In this case, the direct materials cost is $58,000, the direct labor cost is $40,000, and the manufacturing overhead cost is $27,000. To calculate the total prime cost, you simply add these three costs together: $58,000 + $40,000 + $27,000 = $125,000.