Prime Cost

Definition

prime Cost of a product is the total of its direct costs. Once the cost of raw materials used in a particular period has been ascertained and the cost of direct labour and direct expenses is known. Prime cost can be calculated by simply adding up the three figures.

Prime cost calculation formula:

Prime cost = direct materials cost + direct labor cost

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2 thoughts on “Prime Cost”

  1. nehadali says:

    give me cost accounting theory

    1. rashidjaved says:

      Hi,
      Thanks for your interest. I think the below link will be helpful to you.
      https://www.playaccounting.com/menu/exp-ca/

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