Asked by Justin Maynes on Jun 20, 2024
Verified
What was the total prime costs for the period?
A) $20,000
B) $47,000
C) $27,000
D) $95,000
Prime Costs
These are the direct costs of manufacturing a product, including direct materials and direct labor.
Baker's Salaries
Compensation provided to bakers, who are skilled individuals responsible for baking bread, pastries, and other confectioneries.
Indirect Materials
Materials used in the production process that are not directly traceable to the finished product, such as lubricants for machinery.
- Calculate prime costs and understand its components.
Verified Answer
NB
Naiomi BreretonJun 22, 2024
Final Answer :
B
Explanation :
Prime costs consist of direct materials and direct labor. Direct materials can be calculated as beginning raw materials inventory plus purchases minus ending inventory: $18,000 + $28,000 - $19,000 = $27,000. Direct labor is given as baker's salaries: $20,000. Therefore, total prime costs = $27,000 (direct materials) + $20,000 (direct labor) = $47,000.
Learning Objectives
- Calculate prime costs and understand its components.