The direct cost of sales, also known as the prime cost, refers to the aggregate expenses directly tied to the production of a good or service, encompassing direct materials, direct labor, and direct expenses, while excluding overhead costs.
Product costs that can be directly traced to a product or cost unit. They encompass direct materials, direct labor, and direct expenses that are attributable to the product without the need for cost apportionment.
Direct materials cost is the expenditure on materials that are used directly in the production process to manufacture a product. This cost is a part of various costing methods and significantly influences the overall production cost.
The Direct Production Cost of Sales refers to the expenses directly attributable to the manufacturing of goods sold by a company. This includes the costs of raw materials, labor, and other expenses directly involved in production.
A manufacturing account, or manufacturing statement, is an accounting statement forming part of the internal final accounts of a manufacturing organization; for a particular period, it is constructed to show direct cost of sales, manufacturing overhead, total production cost, and cost of goods manufactured. In some cases, a manufacturing profit is also computed.
Materials cost is the expenditure incurred by an organization on direct or indirect materials. The expenditure on direct materials is part of the direct cost of sales, whereas the expenditure on indirect materials is categorized as manufacturing overhead.
Prime cost is a crucial accounting term reflecting the direct costs of production, typically including direct materials and direct labor expenses.
The total of all the costs incurred in producing a product or cost unit. In a manufacturing account, the production cost is represented by the total of the direct cost of sales and the manufacturing overhead.
