Craigmont Company's direct materials costs are $3,000,000,its direct labor costs total $7,000,000,and its factory overhead costs total $5,000,000.Its prime costs total:

A) $10,000,000.
B) $8,000,000.
C) $12,000,000.
D) $5,000,000.
E) $15,000,000.

Question

Gurjot Saini · Accepted Answer

Final Answer : A, Explanation :  Prime costs are the sum of direct materials and direct labor costs.Therefore, Prime costs = Direct Materials + Direct LaborPrime costs = $3,000,000 + $7,000,000Prime costs = $10,000,000Option A is the correct answer.

Craigmont Company's direct materials costs are $3,000,000,its direct labor costs total $7,000,000,and its factory overhead costs total $5,000,000.Its prime costs total:

A) $10,000,000.
B) $8,000,000.
C) $12,000,000.
D) $5,000,000.
E) $15,000,000.

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Craigmont Company's direct materials costs are $3,000,000,its direct labor costs total $7,000,000,and its factory overhead costs total $5,000,000.Its prime costs total:A) $10,000,000.B) $8,000,000.C) $12,000,000.D) $5,000,000.E) $15,000,000.

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Craigmont Company's direct materials costs are $3,000,000,its direct labor costs total $7,000,000,and its factory overhead costs total $5,000,000.Its prime costs total:

A) $10,000,000.
B) $8,000,000.
C) $12,000,000.
D) $5,000,000.
E) $15,000,000.