Prime Cost
Finance
Prime Cost
Sum of direct material and direct labor costs.
Examples
- 01The prime cost of an office chair is EUR 45: EUR 30 of direct material and EUR 15 of direct labour.
- 02Engineering reviews prime cost for each new variant before release to make sure the target margin can be reached.
- 03A redesign that uses one moulded part instead of three welded ones cuts prime cost by EUR 6 per chair.