Question

What are the difference between overhead and prime cost?

Answer 1

Prime cost is the cost of materials and labor involved in production of a commodity, excluding fixed costs.
Overhead cost is the cost of on-going expenses, such as rent, utilities, and insurance. Overhead costs are one of the major factors in determining how a company charges for its service or product.
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Answer 2

Overhead costs are those which are shared by a number of production centres, and would continue unabated if a particular product were discontinued. Prime cost is the cost of materials and labor involved in production of a commodity, excluding fixed costs. Overhead cost is the cost of on-going expenses, such as rent, utilities, and insurance. Overhead costs are one of the major factors in determining how a company charges for its service or product.