Question

Prime costs of a company are $3,000,000, manufacturing overhead is $1,500,000 and direct labor is $750,000. What is the amount of direct materials?
a. $1,500,000.
b. $750,000.
c. $2,250,000.
d. Cannot be determined from the information provided.

Answer 1

This difficult to answer without definitions of eg "prime costs" and "manufacturing overhead"

Answer 2

oh... prime cost means ,a cost involved in producing a product, excluding overheads. Prime costs include direct material costs, direct labour costs and direct expenses. Because such costs can be avoided if output is reduced, they are also called avoidable costs. an i think manufacturing overhead All manufacturing costs other than direct labor and materials.

Answer 3

On this basis, am I then correct in saying that the total costs we know about is

4.5 mill (because the direct labour is included in prime costs)?