Which statement best describes prime cost in hospitality management?

• A. All overhead costs
• B. Only food costs
• C. The sum of food cost and direct labor cost
• D. Indirect costs

Answer: (C)

Prime cost focuses on the main controllable costs tied directly to producing and delivering meals: food cost (the ingredients) plus direct labor (the wages of cooks, servers, and other staff who directly contribute to service). This combination excludes indirect costs like rent, utilities, and administrative expenses, which are considered overhead. So the statement that prime cost equals the sum of food cost and direct labor cost is the best description. Understanding prime cost helps managers monitor efficiency, plan staffing, and set menu prices based on these core production costs.