Question

Robin Company has the following balances for the current month: Direct materials used Direct labor Sales salaries Indirect labor Production manager's salary Marketing costs Factory lease $20,500 $19,800 $15,790 $ 2,350 $ 5,430 $ 7,750 $ 4,670 What are Robin's prime costs?

Answer 1

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Ans:

Robin's prime cost is: $40,300

Note:

Prime cost is defined as expenditures directly related to producing the final product.

Hence, the prime cost comprises of "Direct materials used & Direct labor".

Prime cost = $20,500 + $19,800 = $40,300.

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