Question

the prime cost of an article was three times the value of material used. the cost of raw material was increased in the ratio 3:4 and the productive wage was increased in the ratio 4:5. fin the present prime cost of an article, which could formerly be made for $180

Answer 1

Answer:

Prime cost of the article presently made is Rs. 41.

Step-by-step explanation:

Prime cost = Direct materials used + Direct or productive wages + Direct expenses

Since the particulars of direct expenses is NOT given, the prime cost consists of direct materials and direct wages.

Prime cost of the article formerly made = Rs.18

Direct materials of the article formerly made = 18*1/3 = Rs.6

Direct wages of the article formerly made = 18-6= Rs.12

Direct materials of the article presently made = 6*7/3 = Rs.14

Direct wages of the article presently made = 12*9/4 = Rs.27

Prime cost of the article presently made = 14+27 = Rs.41

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