A company calculates the prices of jobs by adding overheads to the prime cost and adding 30% to total costs as a profit margin. Job number Y256 was sold for Rs1690 and incurred overheads of Rs 694. What was the prime cost of the job?

Rs 489
Rs 606
Rs 996
Rs 1300

The correct answer is B. Rs 606.

The prime cost of a job is the cost of the materials and labor used to produce the job. The overheads are the costs of running the business, such as rent, utilities, and insurance. The profit margin is the amount of money that the company makes on each job.

To calculate the prime cost of job number Y256, we can use the following formula:

Prime cost = Selling price – Overheads – Profit margin

Plugging in the given values, we get:

Prime cost = 1690 – 694 – (1690 * 30/100) = 606

Therefore, the prime cost of job number Y256 is Rs 606.

Option A is incorrect because it is the overhead cost. Option C is incorrect because it is the total cost of the job. Option D is incorrect because it is the selling price of the job.

Exit mobile version