Question

In: Accounting

Craigmont Company's direct materials costs are $5,000,000, its direct labor costs total $8,800,000, and its factory...

Craigmont Company's direct materials costs are $5,000,000, its direct labor costs total $8,800,000, and its factory overhead costs total $6,800,000. Its prime costs total:

Solutions

Expert Solution

Prime Costs Include only Direct materials ,Direct Labour and Direct Expenses and doesnot include Overhead costs which are part of production costs but not Prime Costs

Prime Costs are Direct costs related to production which forms major part of Total Production costs

In this case Craigmont Company's Prime costs = Direct Material Costs +Direct Labour Costs

= $ 5,000,000 + $ 8,800,000

= $ 13,800,000


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