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Commerce · Q296

Costing

Graduate and Post Graduate · Commerce · question 296

Q296

Prime cost is 50000 and direct manufacturing labour is 10000, then direct material cost will be

A.
$40,000
Answer
B.
$60,000
C.
$52,000
D.
$20,000

Answer: Option A

Solution

Answer: Option A
Solution:
Direct material cost = Prime cost - Direct manufacturing labour
= 10000 = $40,000