Question

What is prime cost and overhead cost?

Answer 1

Answer:

Explanation:

prime cost is calculated in the manufacturing account it is the total diect expenses incurred by the factory ...

it is the addition of the direct expenses + direct materials + direct labour

eg royalties , factory wages to workers

while overhead cost

is the total expenses that occur on the day to day running of the business... it is not related to the direct costs of factory ... it is the indirect expenses...

eg: general expenses or insurance