Question
FTH Ltd shared the following information about its
production during the year. Calculate the prime cost for the company:Solution
Prime cost = direct material + direct labour + direct expenses = (Opening RM + Purchases – Closing RM) + Wages paid = 60,000 + 4,80,000 – 50,000 + 2,40,000 = 7,30,000  Note – there are no direct expenses. Prime cost will not consider any overheads, Work-in progress or finished goods.Â
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