ECONOMICS

Detailed explanation-1: -A prime cost is the total direct costs of production, including raw materials and labor. Indirect costs, such as utilities, manager salaries, and delivery costs, are not included in prime costs. The prime cost equation is equal to the cost of raw materials plus direct labor.

Detailed explanation-2: -Prime costs can be calculated using the following formula: Prime cost = direct materials cost + direct labor cost.

Detailed explanation-3: -prime cost in British English noun. the portion of the cost of a commodity that varies directly with the amount of it produced, principally comprising materials and labour. Also called: variable cost.

Detailed explanation-4: -Product costs are costs that are incurred to create a product that is intended for sale to customers. Product costs include direct material (DM), direct labor (DL), and manufacturing overhead (MOH).

Detailed explanation-5: -Explanation: Prime Cost: It consists of the costs of direct materials that go into the product, the costs of direct labor and direct expenses. It is also known as direct cost or first cost.