Global Inc.manufactured 6,000 units during the month of April and incurred a direct materials cost of $110,000 and an 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

The prime cost per unit is the sum of direct materials and direct labor costs per unit. Given the prime cost is $30.00 per unit for 6,000 units, the total prime cost is $180,000 ($30.00 * 6,000). Since the direct materials cost is $110,000, subtracting this from the total prime cost gives the direct labor cost: $180,000 - $110,000 = $70,000.