Prime Cost Definition:
Prime cost is equal to total direct materials cost plus direct labor cost.
Formula of prime cost can be written as: Prime cost = Direct materials + Direct labor
Relevant terms:
Conversion cost
Total factory cost
Other Related Accounting Articles:
- Cost of Goods Manufactured COGM and Sold Statement Formulas
- Conversion Cost Definition
- Materials Quantity Variance Definition
- Labor Rate Variance Definition
- Inventory Conversion Period
- Labor Efficiency Variance Definition
- Direct Labor Definition
- Direct Labor Definition
- Marginal Costing Definition
- Direct Labor Efficiency Variance
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