[ vuZs.net ] MGT101 Answer requested with explanation

If:

• Direct Material Cost is Rs. 15,000
• Factory overhead is Rs. 5,000
• Manufacturing Cost is Rs. 30,000

Then:

What is the amount of Prime Cost?

۩ Rs. 25,000

۩ Rs. 20,000

۩ Rs. 35,000

۩ Rs. 45,000

Prime/Basic Cost = Cost of Direct Material Consumed + Direct Labor cost. 

Direct labour cost is not given here. Do we need to subtract FOH and direct material cost from manufacturing cost?

I am little confused, please clear me. 

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Regards, 

Misbah Yousuf

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