Definition of prime cost in US English:

prime cost


  • The direct cost of a commodity in terms of the materials and labor involved in its production, excluding fixed costs.

    • ‘According to Wright, the development of scientific costing systems in Britain can be traced back to the work of John Walker, who developed a system of allocating overheads based on prime costs.’
    • ‘Indirect expenses were to be distributed over the various jobs as a percentage of wages paid or prime cost.’
    • ‘The last two years saw a sharp price rise in fuels, which account for some 80 per cent of the prime cost of central heating.’
    • ‘In a document called ‘Report for 1943 Renegotiation ’, Sperry called it company ‘policy’ to lower the prices of its products when manufacturing experience, reflected by reduced prime costs, was gained.’
    • ‘Clear criteria will be introduced for charging VAT for goods and services that are sold below their prime cost.’


prime cost

/ˈpraɪm ˌkɔst/