Prime costs and conversion costs are two methods that businesses use to measure the efficiency of their production operations. Prime costs also mark an item’s rock-bottom selling price; if you sell a product below its prime cost, you’re losing money on each unit. To generate a positive gross profit margin, products should sell for more … Continue reading What is the difference between prime costs and conversion costs?

In terms of financial statements, you can find your retained earnings account (sometimes called Member Capital) on your balance sheet in the equity section, alongside shareholders’ equity. In rare cases, companies include retained earnings on their income statements. This statement of retained earnings can appear as a separate statement or as inclusion on either a … Continue reading Retained Earnings: Calculation, Formula & Examples