ECONOMICS

Detailed explanation-1: -The total of all the direct costs are known as prime costs while the total of all the indirect costs are known as overheads.

Detailed explanation-2: -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-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.