If direct material and direct labor remains fixed irrespective of production volume then these are fixed costs otherwise these are variable costs and normally these are variable costs because it varies with the production volume.
Direct labor and direct material is example of variable cost which increase with each increase of unit. Factory rent is example of fixed cost which remains fixed even in change in number of units produced.
If salary or wage of direct labor workforce is fixed irrespective of number of units manufactured by them then it is fixed cost other wise it is variable cost.
If salary or wage of direct labor workforce is fixed irrespective of number of units manufactured by them then it is fixed cost other wise it is variable cost.
Direct cost is that cost which is directly attributable to products like material and labor.
Formula for prime cost = direct material + direct labor
Direct labor and direct material is example of variable cost which increase with each increase of unit. Factory rent is example of fixed cost which remains fixed even in change in number of units produced.
If salary or wage of direct labor workforce is fixed irrespective of number of units manufactured by them then it is fixed cost other wise it is variable cost.
If salary or wage of direct labor workforce is fixed irrespective of number of units manufactured by them then it is fixed cost other wise it is variable cost.
The prime cost of a product is the direct cost which includes the materials and labor needed. This does not include the fixed costs attached to the material.
Following is the formula for total costtotal cost = fixed overheads + variable overheads + direct labor + direct material
Prime Costs: Prime costs are those costs which are prime importance for making any product and include: Prime Cost = Direct Material + Direct Labor
Direct cost is that cost which is directly attributable to products like material and labor.
Formula for prime cost = direct material + direct labor
Direct material is that raw material which is required to produce the goods while direct labor is that cost without which no goods can be manufactured.
examples of dierect material,indirect,labour,and expenses cost
Other direct cost is direct cost other than direct material and direct labor which is prime cost of production.
prime cost = direct labour cost + direct material cost + direct expenses