Prime Cost
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MS: Kos Utama · EN: Prime Cost · ZH: 主要成本
Meaning
Prime cost is the total of all direct production costs, namely direct material cost plus direct labour cost plus direct expenses if any. It represents costs that can be traced directly to the goods produced. Prime cost is the first section of the Manufacturing Account.
Example
Kraf Indah Enterprise has direct materials of RM40,000, direct labour of RM15,000 and direct expenses of RM5,000. Prime cost is RM40,000 + RM15,000 + RM5,000 = RM60,000.
Source: DSKP KSSM Prinsip Perakaunan Tingkatan 5