Tuesday, June 2, 2015

Prime Cost

Definition of 'Prime Cost'

A business’s expenses for materials & labor it uses în production, Prime cost îs way of measuring total cost of production inputs needed to create given output, By analyzing its prime costs, company can determine how much it must charge for its finished product în order to make profit, By lowering its prime costs, company can increase its profit margin and/or undercut its competitors’ prices,

Expertsmind,com explains 'Prime Cost'

For example, prime costs for creating can of soda would include raw materials such as aluminum needed for cans, ink to customize cans with product’s brand name & logo, soda ingredients (i,e, carbonated water, caramel coloring, caffeine, sugar - aspartame & preservatives), freight charges to transport raw materials to manufacturing plant & wages, taxes & benefits paid to - on behalf of employees involved în soda manufacturing process,

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