Sum of direct materials and direct labor
Prime cost = direct materials + direct labor while conversion cost = direct labor + factory overhead( which includes indirect materials, indirect labor and other indirect costs
It is the lowest rate that banks lend money to busines or consumers. It is the lowest rate that banks lend money to business' and consumers.
Prime cost basically is the cost of direct labor and cost of direct material; whereas conversion costs is Overhead cost and direct labor cost.
direct labor