Management of Lewallen Corporation has asked your help as an intern in preparing some key reports for September. Direct materials cost was $57,000, direct labor cost was $43,000, and manufacturing overhead was $71,000. Selling expense was $15,000 and administrative expense was $32,000. The prime cost for September was:
A)$114,000
B)$100,000
C)$103,000
D)$47,000

Question

Quizplus · Accepted Answer

Prime cost is the sum of direct materials and direct labor costs. Therefore, $57,000 (direct materials) + $43,000 (direct labor) = $100,000.

Management of Lewallen Corporation Has Asked Your Help as an Intern