If the direct material cost is $5500 and the prime cost is $25000, then the direct manufacturing labor would be ___________?
Correct answer: A. $19,500
- A. $19,500
- B. $30,500
- C. $45,500
- D. $22,500
Explanation
Direct manufacturing labor equals prime cost minus direct materials: $25,000 − $5,500 = $19,500. Prime cost includes these two direct cost components only.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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