Prime Cost

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What is Prime Cost? – Definition

Prime Cost is the aggregate of direct material cost, direct labor cost and direct expenses. Prime Cost is also known as ‘Flat Cost’, ‘First Cost’ or ‘Direct Cost’.

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 labor and direct expenses is known. The prime cost can be calculated by simply adding up the three figures.

Prime cost calculation formula:

Prime cost = direct materials cost + direct labor cost

3 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/

  2. marthinus says:

    i need the theory of some examples of a prime cost?

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