Total production cost- #360,000
Factory overhead cost- #56,000
Selling price per unit- # 120
Production volume 4000 units
Determine the value of prime cost
- #416,000
-
#304,000
- #240,000
- #184,000
The correct answer is: B
Explanation
Prime cost is the direct cost of a commodity in terms of the materials and labour involved in its production, excluding fixed costs and overheads.
360,000 - 56,000 = 304,000