What is prime cost?
Prime cost percentage combines cost of goods sold and labor, divided by total sales. Together, $25,000 in prime costs on $40,000 in sales equals 62.5%.
See it in action.
Here's an example using the numbers already in the calculator:
- 01Gather your numbers.
Cost of goods sold: $13000; Total labor cost: $12000; Total sales: $40000.
- 02Apply the formula.
(Cost of goods sold + labor cost) ÷ total sales × 100.
- 03Review the result.
Your estimated prime cost percentage is 62.5%. Adjust the inputs to explore your own scenario.
Make the most of your numbers.
- Use figures from the same time period and keep your units consistent.
- Update your inputs regularly as prices, demand, and operating costs change.
- Use the result as a planning guide alongside your own business context and professional advice.
Frequently asked questions.
What does the prime cost calculator tell me?+
Prime cost percentage combines cost of goods sold and labor, divided by total sales. Together, $25,000 in prime costs on $40,000 in sales equals 62.5%.
How often should I review this number?+
Review it whenever the underlying costs or assumptions change, and compare results consistently over time. The right frequency depends on your operation.
Is this result a substitute for financial advice?+
No. This calculator is an estimate for planning and education. Check your assumptions and consult a qualified professional when making financial or compliance decisions.
