Question

Difference between prime cost and overhead cost

Answer 1

Hi

Prime cost is cost of materials and labor involved in a production of commodity, excluding fixed costs. Overhead cost is the cost of on-going expenses such as rent,utility, and insurance. - Prime cost refers to the expenses incurred in acquisition of raw materials and labour to be used in production

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Answer 2

Answer:

Prime cost refers to the expenses incurred in acquisition of raw materials and labour to be used in production. Establishing prime costs helps in determining the amount of input required to get a specified output.

-On the other hand overhead costs refer to those cost incurred in running business that are not directly intertwined with the production.

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