Classification of labour costs, Cost Accounting

Assignment Help:

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.


Related Discussions:- Classification of labour costs

What are the variable expenses per unit, Superior Door Company sells pre-hu...

Superior Door Company sells pre-hung doors to home builders. The doors are sold for $60 each. Variable costs are $42 per door and fixed costs total $450,000 per year. The company i

Estimate fixed overhead variances, Estimate Fixed Overhead Variances ...

Estimate Fixed Overhead Variances Referring to data, we can estimate the fixed overhead variances as given below: Budget for December 2003;

Determine which project is more lucrative - investment , The Zooline Compan...

The Zooline Company (Pty) Ltd is an American based company that focuses on the LSM 8 -10 markets. They do vehicle interiors, raise or lower suspensions and install top end sound sy

Reserves and surplus, Reserves and surplus or retained earnings usually occ...

Reserves and surplus or retained earnings usually occur out of profitable operations. This is a surplus not distributed through the firm as dividends. Conversely, these are profits

Estimate the debt and assets ratio, 1. Wrangle Corporation stock sells at a...

1. Wrangle Corporation stock sells at a price of $80 a share and the riskless rate is 7%. Calculate the price of a 9-month call option on Wrangle stock with an exercise price of $7

What is emv and eol approach, Adele Weiss manages the campus flower shop. ...

Adele Weiss manages the campus flower shop. Flowers must be ordered three days in advance from her supplier in Mexico. Advance sales are so small that Weiss has no way to estimate

MATERIALCOSTING, what are the material management questions

what are the material management questions

What is cmmi, Capability Maturity Model Integration (CMMI) is a process dev...

Capability Maturity Model Integration (CMMI) is a process development approach that gives organizations with the essential elements of effective processes. It can be used to gui

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd