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

Cost concepts / classification of costs, COST CONCEPTS / CLASSIFICATION OF ...

COST CONCEPTS / CLASSIFICATION OF COSTS 1. According to functions Administration cost / office cost Selling cost Production cost / factory cost / manufacturing c

EXPECTED CASH COLLECTIONS, WORKED EXAMPLES OF EXPECTED CASH COLLECTIONS PAT...

WORKED EXAMPLES OF EXPECTED CASH COLLECTIONS PATTERNS

Cost profit volume analysis, COST PROFIT VOLUME ANALYSIS Cost profit vo...

COST PROFIT VOLUME ANALYSIS Cost profit volume (CVP) analysis is an essential tool for profit planning. It can be explained  as - ' a managerial tool showing the relationship a

Rvu methodology, Assume that a primary care physician practice performs onl...

Assume that a primary care physician practice performs only physical examinations.  However, there are three levels of examinations I, II, III - that vary in depth and complexity.

Who would be affected if the proposal is implemented?, Outdoors R Us owns s...

Outdoors R Us owns several membership-based campground resorts throughout the Southwest. The company sells campground sites to new members, usually during a get-acquainted visit an

Calculate the cost of capital and units of capital, The owner of the Hughes...

The owner of the Hughes Car Wash believes that the relationship between the number of cars washed and the amount of labor employed is Q = 0.8 + 4.5 L - 0.3 L2 where Q = the num

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