Direct labor for a company was $132,000; manufacturing overhead was $275,000; and direct materials were $253,000.Prime costs would total:
A)$407,000.
B)$385,000.
C)$660,000.
D)$528,000.

Question

Quizplus · Accepted Answer

Prime costs are the direct costs of production, which include direct materials and direct labor. Therefore, prime costs equal direct labor plus direct materials, which is $132,000 + $253,000 = $385,000. The manufacturing overhead is not included in the calculation of prime costs.

Direct Labor for a Company Was $132,000; Manufacturing Overhead Was