Craigmont Company's direct materials costs are $3,000,000,its direct labor costs total $7,000,000,and its factory overhead costs total $5,000,000.Its prime costs total:
A)$10,000,000.
B)$8,000,000.
C)$12,000,000.
D)$5,000,000.
E)$15,000,000.

Question

Quizplus · Accepted Answer

Prime costs are the sum of direct materials and direct labor costs. Therefore, prime costs in this case are $3,000,000 + $7,000,000 = $10,000,000.

Craigmont Company's Direct Materials Costs Are $3,000,000,its Direct Labor Costs