Question

The Rawesome Cafeteria manufactures round metal tabletops for restaurants. The machinist uses ¼ sheet of metal for each tabletop including waste. Each sheet costs $380. The machinist cuts and polishes five tabletops each hour. The direct labor charge is $27.50 per hour. To the nearest cent, what is Rawesome's prime cost of cutting and polishing a tabletop?

Answer 1

Prime cost is the combination of a manufactured product's costs of direct materials and direct labor. In other words, prime cost refers to the direct production costs.
Prime cost=direct material cost+direct labor cost

Direct material cost of a tabletop is
380×(1÷4)=95 for each tabletop

Direct labor cost
The question says The machinist cuts and polishes five tabletops each hour
Which means 27.50 of direct labor to cut and polish 5 tabletops So direct labor cost for each tabletop is
27.50÷5=5.5

Finally the prime cost of cutting and polishing a tabletop is
Prime cost=95+5.5=100.5