Following are the prime cost items:
1 - Direct material
2 - Direct labor
Direct labor and direct materials are the components of prime cost so no other cost is part of prime cost and hence variable overheads also not included in prime cost.
Formula for Prime Cost = Material Cost + Labor Cost
yes it is part of the prime cost
No
Formula for prime cost = direct material + direct labor
PC items are Prime Cost items eg bath, mirror, vanity, taps etc.
Patloon
Prime cost is a subset of Factory cost. Prime cost consist of Direct material, Direct labour and Direct expenses. Factory cost = Prime cost + Production OH
Direct labor and direct materials are the components of prime cost so no other cost is part of prime cost and hence variable overheads also not included in prime cost.
Formula for Prime Cost = Material Cost + Labor Cost
yes it is part of the prime cost
Sales minus Prime cost = Prime Margines. Direct material and direct labor are often referred to as prime cost.
No
Direct labor and direct materials are the two main components of prime cost. Another component of prime cost is direct expense.
Formula for prime cost = direct material + direct labor
The cost of purchasing 10 items for the price of 2 is the same as buying 5 sets of 2 items, which would be the cost of 10 items.
Formula for prime cost is as follows: prime cost = direct material + direct labor So according to above mention formula yes it is prime cost because whitout labor no unit of product can be manufactured.