Big Blue Bubble Company produces a product with the following per-unit costs:
Last year, Gateway produced and sold 750 units at a sales price of $80 each. Total selling and administrative expense was $25,000.
$\begin{array}{lr}
\text { Direct materials } & \$ 15 \
\text { Direct labour } & 10 \
\text { Overhead } & 15
\end{array}$
-Refer to the Figure.What was the prime cost per unit?
A)$11
B)$25
C)$30
D)$34

Question

Big Blue Bubble Company produces a product with the following per-unit costs:
Last year, Gateway produced and sold 750 units at a sales price of $80 each. Total selling and administrative expense was $25,000.
 $\begin{array}{lr}
\text { Direct materials } & \$ 15 \
\text { Direct labour } & 10 \
\text { Overhead } & 15
\end{array}$
-Refer to the Figure.What was the prime cost per unit?
A)$11
B)$25
C)$30
D)$34

Quizplus · Accepted Answer

Prime cost per unit is calculated as the sum of direct materials and direct labor costs. Therefore, prime cost per unit = $15 (direct materials) + $10 (direct labor) = $25.

Big Blue Bubble Company Produces a Product with the Following Direct materials $15 Direct labour 10 Overhead 15\begin{array}{lr}\text { Direct materials } & \$ 15 \\\text { Direct labour } & 10 \\\text { Overhead } & 15\end{array} Direct materials Direct labour Overhead ​$151015​

Big Blue Bubble Company Produces a Product with the Following $\begin{array}{lr}\text { Direct materials } & \$ 15 \\\text { Direct labour } & 10 \\\text { Overhead } & 15\end{array}$