Total production cost- #360,000
Factory overhead cost- #56,000
Selling price per unit- # 120
Production volume 4000 units
Determine the value of prime cost
Factory overhead cost- #56,000
Selling price per unit- # 120
Production volume 4000 units
Determine the value of prime cost
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Correct Answer: Option B
Explanation:
Prime cost is the direct cost of a commodity in terms of the materials and labour involved in its production, excluding fixed costs and overheads.
360,000 - 56,000 = 304,000
Prime cost is the direct cost of a commodity in terms of the materials and labour involved in its production, excluding fixed costs and overheads.
360,000 - 56,000 = 304,000