Labour Costs and Overhead costs

Labour Costs

Labour costs can be indirect or direct labour costs. Direct labour cost refers to wages paid to workers who such are directly included in the conversion of raw materials to finished goods. These are named direct labour costs Indirect labour costs concern to the wages paid to workers that efforts cannot be readily identified along with specific product units or batches as like an example of labourers paid to keep all the premises employed for production of services and goods.

Overhead Costs

They are named also as indirect production costs. They are those costs that can only be charged to a cost unit by using few estimated basis. The estimating procedure permits a share of the indirect costs being charged to each cost unit.  Such costs cannot be identified particularly to the end product.