ECONOMICS

Detailed explanation-1: -Prime costs are all of the costs that are directly attributed to the production of each product. Prime costs are direct costs, meaning they include the costs of direct materials and direct labor involved in manufacturing an item. Companies use prime costs to price their products.

Detailed explanation-2: -Prime cost is calculated by adding the cost of raw materials to the cost of labor directly associated with the production process. The formula is as follows: Prime Cost = Direct Expenses + Direct Wages.

Detailed explanation-3: -Direct material: The cost of wood used to create the tables. Direct labor: The cost of wages and benefits for the carpenters to create the tables.

Detailed explanation-4: -Prime costs can be calculated using the following formula: Prime cost = direct materials cost + direct labor cost.

Detailed explanation-5: -Direct costs are expenses that can be directly tied to the production of a product and can include direct labor and direct material costs. Direct costs can be fixed costs such as the rent for a production plant.