Noteworthy, Inc., produces and sells small electronic keyboards. Assume that you

Question

Noteworthy, Inc., produces and sells small electronic keyboards. Assume that you have the following information about Noteworthy's costs for the most recent month.


Depreciation on factory equipment---------------------$800
Depreciation on CEO's company car----------------------100
Speakers used in the keyboard------------------------1,100
Production supervisor's salary--------------------------2,200
Glue and screws used in the keyboards------------------370
Wages of persons who install the speakers------------2,800
Cost to run an ad on local radio stations----------------600
Utilities for the factory----------------------------------1,200
Personnel manager's salary----------------------------2,500
Wages of person who attaches legs to keyboards---1,950


Calculate the prime cost for Noteworthy. (Omit the "$" sign in your response.)

Prime cost:$_______

Explanation / Answer

Prime cost is the sum of direct costs, which are the sum of the following: Speakers used in the keyboard------------------------1,100 Glue and screws used in the keyboards------------------370 Wages of persons who install the speakers------------2,800 Wages of person who attaches legs to keyboards---1,950 Thus, the prime cost is $6220. Hope this helps!

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