DIRECT COST CLASSIFICATION - Accounts and Finance for Managers

Under this classification, the direct costs of the product or service are added together to know the volume of total direct cost. The total volume of direct cost is known as "Prime Cost"
Direct Materials +Direct Labour+ Direct Expenses = Prime costDIRECT COST CLASSIFICATION

The next stage in the unit costing to find out the factory cost. The factory cost could be computed by the combination of the indirect cost classification.

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