Global Inc. manufactured 6,000 units during the month of April and incurred a direct materials cost of $110,000 and a manufacturing overhead cost of $50,000. Suppose the per-unit prime cost was $30.00 per unit. How much direct labour cost did Global incur during April?
A) $20,000
B) $70,000
C) $85,000
D) $90,000

Question

Quizplus · Accepted Answer

Prime cost per unit is the sum of direct materials and direct labor costs. Given the prime cost is $30 per unit for 6,000 units, the total prime cost is $180,000. Subtracting the direct materials cost of $110,000 from the total prime cost gives a direct labor cost of $70,000.