Classification of labour costs, Cost Accounting

Classification of Labour Costs

This can be classified into like:

a) Indirect or Direct cost

b) Variable or Fixed cost

c) Non controllable and controllable cost

a) Direct labour cost might be defined like the cost of remuneration for staff skills and efforts applied directly to a product or saleable service and that can be recognized separately in product costs.

Indirect labour cost may be defined like labour costs that are not charged directly to a product. The analysis of labour costs into indirect or direct cost depends on the circumstances under review

Examples involve-

The wage paid to a worker who assembles components for a product is a direct cost while that paid to a worker who is moving components for a range of products from one part of the factory to another is an indirect cost.

b) Fixed cost in relation to labour is where through a worker is paid a fixed weekly wage irrespective of the output produced cost varies directly along with level of activity, as an example of whereas wages are paid at a rate per unit.

c) Variable Labour Cost varies directly along with level of activity, for example where wages are paid per unit.

d) Controllable labour cost is a cost that can be influenced via the actions of a person in whom authority for such control is vested. The control of labour costs will be influenced via the method of remuneration and the degree of management control that is exercised.

Such uncontrollable labour costs cannot be influenced with an officer in the organization, as like an example of, wage rise agitated via the trade union is an uncontrollable labour cost.

Posted Date: 2/5/2013 5:49:12 AM | Location : United States







Related Discussions:- Classification of labour costs, Assignment Help, Ask Question on Classification of labour costs, Get Answer, Expert's Help, Classification of labour costs Discussions

Write discussion on Classification of labour costs
Your posts are moderated
Related Questions
what is the purpose of cost accounting and its nat ure?

1.  Prepare a cash flow forecast for the proposal to launch SafeCus in 2010 for a three-year period from 1 January 2010 using the data in the body of the Case Study and discount at

In January 2012, the management of Stefan Company concludes that it has sufficient cash to permit some short-term investments in debt and stock securities. During the year, the fol

Keira Knightley Company buys a piece of equipment for $36,442 that will last for 7 years. The equipment will generate cash flows of $7,000 per year and will have no salvage value a

The following data pertains to an investment proposal: Required investment $400,000 Annual cost savings $105,700 Projected life of investment 6 years Projected salvage value $0 Req

tell me about debentures

XYZ Corporation recieves $100,000 from investors for issuing them shares of its stock. XYZ's journal entry to record this transaction would include a a debit to investment b

Distribution and Selling Cost Budget This is the forecast of all costs incurred in distributing and selling the company's product throughout the budget period. This is closel

Assume that you are the purchaser of the building at the end of the construction period, and you have paid the developer an amount which gives you a 7% annual return on net revenue