direct cost

(redirected from prime cost)
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direct cost

A cost that can be directly related to producing specific goods or performing a specific service. For example, the wages of an employee engaged in producing a product can be attributed directly to the cost of manufacturing that product. Certain other costs such as depreciation and administrative expenses are more difficult to assign and are not considered direct costs. Compare indirect cost.

direct cost

or

prime cost

the sum of the DIRECT MATERIALS cost and the DIRECT LABOUR cost of a product. Direct costs tend to vary proportionately with the level of output. See COST.

direct cost

the sum of the DIRECT MATERIALS cost and DIRECT LABOUR cost of a product. Direct cost tends to vary proportionately with the level of output. See VARIABLE COST.