Joyce Company is a printing shop that offers products including brochures, advertising flyers, wedding invitations, etc. The company has accepted an order from Jane Anderson for wedding invitations. The job will require 200 sheets of card stock at $0.15 per sheet and $30 worth of various inks. The job will also require two hours of direct labor time at $15 per hour. Overhead is applied on the basis of direct labor using a plant-wide rate of $20 per hour.
-What is the prime cost of the wedding invitations ordered by Jane Anderson?

Question

Joyce Company is a printing shop that offers products including brochures, advertising flyers, wedding invitations, etc. The company has accepted an order from Jane Anderson for wedding invitations. The job will require 200 sheets of card stock at $0.15 per sheet and $30 worth of various inks. The job will also require two hours of direct labor time at $15 per hour. Overhead is applied on the basis of direct labor using a plant-wide rate of $20 per hour. 
-What is the prime cost of the wedding invitations ordered by Jane Anderson?

Quizplus · Accepted Answer

Prime cost includes direct material, direct labor, and direct overhead. Direct material is $200 x $0.15 = $30. Direct labor is 2 hours x $15 = $30. Direct overhead is 2 hours x $20 = $40. Prime cost is $30 + $30 + $40 = $100.

Joyce Company Is a Printing Shop That Offers Products Including