I'm definitely going with B) $344,000. It's the only answer that matches the raw material and direct labor costs given in the information. Whoever wrote this question must have been trying to trick us!
I almost went with B, but then I remembered that prime cost includes indirect labor too. So I'm going to have to say D) $397,000 is the right answer. Gotta love these trick questions!
D) $397,000 looks like the correct answer to me. The question asks for the prime cost, which includes raw material and direct labor, and the total of those two figures is $397,000.
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