The following details were extracted from the financial records of Apex Manufacturing Enterprise for the year ended 31st December 2025:
| Financial Item | Amount (₦) |
|---|---|
| Inventory of Raw Materials (1st January 2025) | 45,000 |
| Purchases of Raw Materials | 180,000 |
| Carriage Inwards on Raw Materials | 12,000 |
| Returns Outward of Raw Materials | 8,000 |
| Inventory of Raw Materials (31st December 2025) | 52,000 |
| Direct Factory Wages Paid | 95,000 |
| Direct Wages Accrued (31st December 2025) | 15,000 |
| Direct Wages Prepaid (1st January 2025) | 5,000 |
| Royalties Paid on Production | 25,000 |
| Hire of Special Machine for Production | 10,000 |
| Factory Supervisor's Salary | 40,000 |
| Factory Rent and Rates | 30,000 |
| Depreciation of Factory Machinery | 18,000 |
| Carriage Outwards on Finished Goods | 14,000 |
Calculate the Prime Cost for Apex Manufacturing Enterprise for the year ended 31st December 2025.
Cevap: 327000 NGN
Cevap
The Prime Cost for Apex Manufacturing Enterprise for the year ended 31st December 2025 is ₦327,000.
Prime Cost is the sum of all direct costs incurred in manufacturing: Direct Materials Consumed (₦177,000) + Direct Labour (₦115,000) + Direct Expenses (₦35,000) = ₦327,000. Indirect costs (factory supervisor's salary, factory rent, and machinery depreciation) are factory overheads and must be excluded, as well as carriage outwards which is a selling expense.
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Direct Costs and Calculation of Prime Cost
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