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
Direct Cost as a Relevant Cost Direct costs may be directly chargeable to a cost center or a product. They may be fixed costs or variable costs whereas it comes to decision-ma

The beginning inventory balances of Item X on August 1 and the purchases of the item during the month of August were as follows: August 1 Beginning Inventory 600 units @ $10.00


REPORT ON SATYAM

what is traditional costing system

If fixed costs are $200,000 and the unit contribution margin is $20, what amount of units must be sold in order to have a zero profit?

A company wishes to devise a fair means of allocating funds to its four main departments, namely Accounts, Production, Sales and Transport. The total allocation is to be £100,000.

Beaver Company (a multi-product firm) produces 5,000 units of Product X each year. Each unit of Product X sells for $8 and has a contribution margin of $5. If Product X is disconti

Attainable Standards and Current Standards Although the standard must be set high sufficient that achievable and it has to be worked for. Attainable standards must provide a c

From  the  following  data  write the  standard  cost  card  for  one  unit  of  the  sole  product manufactured.                                    Standard Cost card for One U