Question

Proton Company manufactured 12,000 units and reported the following information during December:

Direct materials 40,000
Direct labor20,000
Variable overhead 37,000
Fixed overhead25,000
The prime cost per unit is ________.

Answer 1

The prime cost per unit for Proton Company is $8.08.

Step-by-step explanation:

The prime cost per unit can be calculated by adding the direct materials cost, direct labor cost, and variable overhead cost per unit.

Given that the Direct materials cost is $40,000, Direct labor cost is $20,000, and Variable overhead is $37,000 for 12,000 units, we can calculate the prime cost per unit as follows:

Prime Cost per Unit = (Direct materials cost + Direct labor cost + Variable overhead) / Number of units

Prime Cost per Unit = ($40,000 + $20,000 + $37,000) / 12,000 = $97,000 / 12,000 = $8.08 per unit.