Page 64 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 64
Chapter 4
Test your understanding 3
A manufacturing company is about to start manufacturing a new product, the
FX200.
The management accountant has provided the following information about the
unit cost of the FX200
Direct labour 3 hours @ $10/hr
Indirect labour 2 hours @ $9/hr
Direct material 4 kg @ $5/kg
Indirect material $10
Direct expenses $4
Indirect expenses $7
Selling and distribution overhead $5
What is the prime cost of one unit of FX200?
Test your understanding 4
Prime cost is:
A all costs incurred in manufacturing a product
B the total of direct costs
C the material cost of a product
D the cost of producing one additional unit
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