Use the information below to answer this questi... - JAMB Accounting 2015 Question
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
\(\begin{array}{c|c}
\text{Raw materials jan.} & 5,000 \\ \hline
\text{Raw materials dec.} & 5,800 \\ \hline
\text{Purchase of raw materials} & 45,000 \\ \hline
\text{Salary} & 61,000 \\ \hline
\text{Factory lubricant} & 2,050 \\ \hline
\text{plant depreciation} & 1,300 \\ \hline
\text{Factory insurance} & 1,250 \\ \end{array}\)
The prime cost for the company is
A
N169, 200
B
N44, 200
C
N55, 800
D
N230, 200
correct option: a
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
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
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