Craigmont Company's direct materials costs are $4,600,000, its direct labor costs total $8,440,000, and its factory overhead costs total $6,440,000.t the total Prime Cost before we answer the same let's understand is a prime cost is basically the aggregate of direct material and labor costs and excludes fixed costs and overhead expenses.
Accordingly, Craigmont Company Prime Cost is computed as follows:
Prime cost=Direct Material Cost + Direct Labor Cost
= $4600,000+$8440,000
=$13040000
Prime Cost=$13,040,000
A top value is the full direct fees of manufacturing, which includes uncooked substances and exertions. indirect charges, along with utilities, supervisor salaries, and shipping costs, aren't protected in prime prices. groups want to calculate the top price of every product synthetic to ensure they are producing an income.
prime prices consult with the fees at once associated with generating a product, specifically, raw cloth and labor costs. Overhead expenses are expenses circuitously associated with producing a product, which include leases and utilities.
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