Asked by Caitlin Gamble on May 28, 2024
Verified
The following costs were incurred in May: 
Prime costs during the month totaled:
A) $93,600
B) $143,800
C) $70,200
D) $49,300
Prime Costs
The combined costs of direct materials and direct labor that are directly attributable to the production process.
Incurred
Refers to costs or expenses that have been realized or acquired in the execution of business activities or operations.
Costs
The expenses incurred in the production of goods or services or in the undertaking of any activity.
- Understand the calculation and components of prime costs.
Verified Answer
OT
Olivia ThaggardMay 28, 2024
Final Answer :
C
Explanation :
Prime costs typically include direct materials and direct labor costs. Without more information, it's difficult to determine if any of the costs listed in the table are indirect or overhead costs. However, we can add up the costs that are clearly direct materials and labor costs:
$22,000 (materials) + $48,000 (direct labor) = $70,000. Therefore, the best choice is C, which is closest to this total.
$22,000 (materials) + $48,000 (direct labor) = $70,000. Therefore, the best choice is C, which is closest to this total.
Learning Objectives
- Understand the calculation and components of prime costs.