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Labour costs are classified into the following classes;
i) Direct labour costs are defined as cost of remuneration for employees? efforts and skills applied directly to a product a saleable service and which can be identified separately in a product.
ii) Indirect labour costs are defined as those labour costs which are not charged directly to a product. The analysis of labour into direct and indirect will depend upon the circumstances under review. The following example illustrates this problem.
a) The wage paid to a work who assembles components is a direct labour costs.
b) Wages paid to work moving component for a range of product from one part of the factory to another is indirect cost.
c) Wages paid to a supervising in a production department e.g. tire building is indirect labour cost.
Wilfykil answered the question on August 5, 2019 at 12:16
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