why is it called prime cost 
the word prime stems from the latin word pr tos which means first in existence or the first in order just as prime numbers are indivisible prime costs refer to the direct costs of raw materials and labor that are essential to manufacturing a product the bottom lineprime costs are the direct costs of creating a product or service such as materials and labor it does not take into consideration other costs such as utilities and rent understanding prime costs helps businesses set price levels and understand the margin they re generating from their goods or services 