Prime Cost Calculator

✖Direct Materials Cost is the expense of raw materials that are directly used in the manufacturing of a product.ⓘ Direct Materials Cost [DMC]			+10% -10%
✖Direct Labour Cost is the expense of wages for workers who are directly involved in the production of goods.ⓘ Direct Labour Cost [DLC]			+10% -10%

✖Prime Cost is the total of direct materials and direct labor costs used in production.ⓘ Prime Cost [C_Prime]

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Formula

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Prime Cost

Formula

`"C"_{"Prime"} = "DMC"+"DLC"`

Example

`"1600"="1000"+"600"`

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Prime Cost Solution

STEP 0: Pre-Calculation Summary

Formula Used

Prime Cost = Direct Materials Cost+Direct Labour Cost
C_Prime = DMC+DLC
This formula uses 3 Variables

Variables Used

Prime Cost - Prime Cost is the total of direct materials and direct labor costs used in production.
Direct Materials Cost - Direct Materials Cost is the expense of raw materials that are directly used in the manufacturing of a product.
Direct Labour Cost - Direct Labour Cost is the expense of wages for workers who are directly involved in the production of goods.

STEP 1: Convert Input(s) to Base Unit

Direct Materials Cost: 1000 --> No Conversion Required
Direct Labour Cost: 600 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

C_Prime = DMC+DLC --> 1000+600

Evaluating ... ...

C_Prime = 1600

STEP 3: Convert Result to Output's Unit

1600 --> No Conversion Required

FINAL ANSWER

1600 <-- Prime Cost

(Calculation completed in 00.020 seconds)

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Credits

Created by Keerthika Bathula

Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

Keerthika Bathula has created this Calculator and 50+ more calculators!

Verified by Aashna

IGNOU (IGNOU), India

Aashna has verified this Calculator and 25+ more calculators!

< 25 Cost Accounting Calculators

Material Cost Variance

Go Material Cost Variance = (Standard Quality for Actual Output*Standard Price)-(Actual Quantity*Actual Price)

Labour Cost Variance

Go Labour Cost Variance = (Standard Hours for Actual Output*Standard Rate)-(Actual Hours*Actual Rate)

Revised Standard Quantity

Go Revised Standard Quantity = (Standard Quantity of each Material/Total Standard Quantity)*Total Actual Quantity

Learning Curve

Go Learning Curve = (Time Taken to Produce Initial Quantity*Cumulative Number of Batches)^(-Learning Coefficient)

Labour Efficiency Variance

Go Labour Efficiency Variance = Standard Rate*(Standard Time-Actual Time)*Variance

Time to Receive

Go Time to Receive = Time for Stock Validation+Time to Add Stock to Records+Time to Prep Stock for Storage

Labour Rate Variance

Go Labour Rate Variance = Actual Time*(Standard Rate-Actual Rate)*Variance

Cycle Time

Go Cycle Time = Process Time+Inspection Time+Move Time+Queue Time

Revised Standard Hours of Labours

Go Revised Standard Hours of Labours = (Actual Mix/Standard Mix)*(Standard Hours of Labour)

Material Yield Variance

Go Material Yield Variance = (Actual Unit Usage-Standard Unit Usage)*Standard Cost per Unit

Overall Equipment Effectiveness

Go Overall Equipment Effectiveness = Good Count*Ideal Cycle Time/Planned Production Time

Avoided Cost

Go Avoided Costs = Assumed Repair Cost+Production Losses-Preventative Maintenance Cost

Material Usage Variance

Go Material Usage Variance = Standard Price*(Actual Quantity Units-Standard Quantity)

Labour Mix Variance

Go Labour Mix Variance = Standard Rate*(Reversed Standard Rate-Actual Time)

Material Price Variance

Go Material Price Variance = Actual Quantity*(Standard Price-Actual Price)

Material Quantity

Go Material Quantity = Standard Price*(Standard Quantity-Actual Quantity)

Customer Acquisition Cost

Go Customer Acquisition Cost = Cost of Sales and Marketing/Number of New Customers Acquired

Total Addressable Market

Go Total Addressable Market = Annual Contract Value per Client*Number of Potential Clients

First Pass Yield

Go First Pass Yield = Number of Good Products Finished/Number of Production Orders Started

Average Days Delinquent

Go Average Days Delinquent = Days Sales Outstanding-Best Possible Days Sales Outstanding

Backorder Rate

Go Backorder Rate = (Number of Undeliverable Orders/Total Number of Orders)

Monthly Recurring Revenue

Go Monthly Recurring Revenue = Number of Customers*Average Billed Amount

Sell -Through Rate

Go Sell Through Rate = Number of Units Sold/Number of Units Received

Takt Time

Go Takt Time = Production Available Time/Customer Demand

On-Time Delivery

Go On-Time Delivery = On Time Units/Total Units

< 16 Important Formulas of Cost Accounting Calculators

Labour Cost Variance

Go Labour Cost Variance = (Standard Hours for Actual Output*Standard Rate)-(Actual Hours*Actual Rate)

Learning Curve

Go Learning Curve = (Time Taken to Produce Initial Quantity*Cumulative Number of Batches)^(-Learning Coefficient)

Labour Efficiency Variance

Go Labour Efficiency Variance = Standard Rate*(Standard Time-Actual Time)*Variance

Overall Equipment Effectiveness

Go Overall Equipment Effectiveness = Good Count*Ideal Cycle Time/Planned Production Time

Cost of Goods Sold

Go Cost of Goods Sold = Beginning Inventory+Purchases During the Period-Ending Inventory

Material Usage Variance

Go Material Usage Variance = Standard Price*(Actual Quantity Units-Standard Quantity)

Noria Effect

Go Noria Effect = (New Hires Salary Cost-Leavers Salary Cost)/Previous Salary Cost

Customer Acquisition Cost

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Total Addressable Market

Go Total Addressable Market = Annual Contract Value per Client*Number of Potential Clients

Backorder Rate

Go Backorder Rate = (Number of Undeliverable Orders/Total Number of Orders)

Conversion Cost

Go Conversion Cost = Direct Labour Cost+Manufacturing Overhead Cost

Production Cost

Go Production Cost = Total Fixed Costs+Total Variable Costs

Prime Cost

Go Prime Cost = Direct Materials Cost+Direct Labour Cost

Takt Time

Go Takt Time = Production Available Time/Customer Demand

On-Time Delivery

Go On-Time Delivery = On Time Units/Total Units

Unit Cost

Go Unit Cost = Total Cost/Total Units Produced

Prime Cost Formula

Prime Cost = Direct Materials Cost+Direct Labour Cost
C_Prime = DMC+DLC

What is Prime Cost ?

Prime cost refers to the combined total of direct materials and direct labor costs that are directly attributable to the production of goods. Direct materials are the raw materials that are essential and can be directly traced to the finished product, while direct labor involves the wages paid to workers who are directly involved in the manufacturing process. Prime cost is a key metric in cost accounting as it helps businesses determine the efficiency and cost-effectiveness of their production processes by focusing on the primary inputs required to create a product. By analyzing prime costs, companies can better manage and control these expenses, ultimately improving their overall profitability and competitiveness.

How to Calculate Prime Cost?

Prime Cost calculator uses Prime Cost = Direct Materials Cost+Direct Labour Cost to calculate the Prime Cost, The Prime Cost is the sum of direct materials and direct labor costs incurred in production. Prime Cost is denoted by C_Prime symbol.

How to calculate Prime Cost using this online calculator? To use this online calculator for Prime Cost, enter Direct Materials Cost (DMC) & Direct Labour Cost (DLC) and hit the calculate button. Here is how the Prime Cost calculation can be explained with given input values -> 1600 = 1000+600.

FAQ

What is Prime Cost?

The Prime Cost is the sum of direct materials and direct labor costs incurred in production and is represented as C_Prime = DMC+DLC or Prime Cost = Direct Materials Cost+Direct Labour Cost. Direct Materials Cost is the expense of raw materials that are directly used in the manufacturing of a product & Direct Labour Cost is the expense of wages for workers who are directly involved in the production of goods.

How to calculate Prime Cost?

The Prime Cost is the sum of direct materials and direct labor costs incurred in production is calculated using Prime Cost = Direct Materials Cost+Direct Labour Cost. To calculate Prime Cost, you need Direct Materials Cost (DMC) & Direct Labour Cost (DLC). With our tool, you need to enter the respective value for Direct Materials Cost & Direct Labour Cost and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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