"Calculate the prime cost from the following information:
Direct material purchased: Rs. 1,00,000.
Direct material consumed: Rs. 90,000.
Direct labour: Rs. 60,000.
Direct expenses: Rs. 20,000.
Manufacturing overheads: Rs. 30,000."
A. Rs. 1,80,000
B. Rs. 2,00,000
C. Rs. 1,70,000
D. Rs. 2,10,000
Answer: Option C
Solution(By Examveda Team)
Prime cost = Raw material consumed + Direct labour + Direct expenses = 90000 + 60000 + 20000 = Rs. 170000.Join The Discussion
Comments ( 2 )
Related Questions on Costing
Basic objective of cost accounting is ________
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.
Process costing is suitable for ________.
A. hospitals
B. oil refing firms
C. transport firms
D. brick laying firms
The cost which is to be incurred even when a business unit is closed is a _____.
A. imputed cost
B. historical cost
C. sunk cost
D. shutdown cost
Help me solve this question
Purchase of raw material ghc 50000
Opening stock of raw materials ghc 4000
Closing stock of raw materials ghc 3000
Direct wages ghc 16000
Carriage inwards ghc 2000
Carriage outwards ghc 3500
Direct expenses ghc 4500
Indirect expenses ghc 6700
Salaries ghc 13400
Akosua mary and seven daughters company limited have incurred the expenditure above in their manufacturing setting. Calculate the prime cost from the information provided
Prime costs refer to total of direct costs. Why is the cost of direct material not considered?