Use the information below to answer this question. \(\begin{array}{c|c} \text{Raw materials jan.} & 5,000 \\ \hline \text{Raw materials dec.} & 5,800 \\ \hline \text{Purchase of raw materials} & 45,000 \\ \hline \text{Salary} & 61,000 \\ \hline \text{Factory lubricant} & 2,050 \\ \hline \text{plant depreciation} & 1,300 \\ \hline \text{Factory insurance} & 1,250 \\ \end{array}\) The prime cost for the company is
A. N169, 200 B. N44, 200 C. N55, 800 D. N230, 200
Correct Answer: A
Explanation
The prime cost are direct cost,direct material cost, direct labour cost and direct expenses. Therefore: Raw materials (jan)5000 Add purchases 45,000 Less raw materials (dec) 5,800 Cost of raw materials consume 44,200 Prime cost 169,200
