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: Option 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