Question

Calculate Prime cost from the
IL
following:
Opening stock of raw material
12,000
Purchase
material
raw
of
Rs.5,65,000
Closing stock of raw mate.rial
Rs.45,000
Carriage inward 36,000
Direct wages 3,10,000
Direct Expenses Rs.75,000
Administrative overhead Rs. 50,000​

Answer 1

Explanation:

Given:

Opening stock of raw material Rupees. 12,500

Purchase raw material = Rupees. 75,000

Expense incurred on raw material = Rupees. 5,000

Closing stock raw material = Rupees. 22,500

Wages Rupees. 47,600 Direct expenses =

Rupees. 23,400

Raw material consumed-opening stock of material + purchase of raw material + Expense incurred on raw material - Closing stock of raw

material

=12500+75000+5000-22500

=92500-22500

=70,000 Rupees

Prime cost = raw material consumed + Direct

labour Direct expenses

=70,000+47,600+23,400

Prime cost 1,41,000 Rupees

Answer 2

Answer:

Prime cost calculation

Bharath Vamaravelli

Calculate Prime cost from the

IL

following:

Opening stock of raw material

12,000

Purchase

material

raw

of

Rs.5,65,000

Closing stock of raw mate.rial

Rs.45,000

Carriage inward 36,000

Direct wages 3,10,000

Direct Expenses Rs.75,000

Administrative overhead Rs. 50,000

Prime cost can be calculated by adding together the cost of raw materials, direct wages, and direct expenses. Using the information provided:

Prime cost = Opening stock of raw material + Purchase of raw material + Carriage inward + Direct wages + Direct Expenses

Prime cost = 12,000 + 5,65,000 + 36,000 + 3,10,000 + 75,000

Prime cost = 9,88,000

Note that Administrative overhead is not included in Prime cost as it is an indirect cost and not directly associated with the production process