Direct labor cost
Direct labor cost is a part of wage-bill or payroll that can be specifically and consistently assigned to or associated with the manufacture of a product, a particular work order, or provision of a service. Also, we can say it is the cost of the work done by those workers who actually make the product on the production line.
Determination of the direct labor cost [ edit ]
- Planning the work to be performed.
- Describing the job content of the work, by indicating the skill, knowledge, etc.
- Matching the jobs with the employees.
Usage [ edit ]
The direct labor cost is part of the manufacturing cost.
Calculation of direct labor cost [ edit ]
In the direct labor cost we need to have the job time and wage we will pay it to the worker to calculate the direct labor cost as in this formulation:-
Wage [ edit ]
The wage is the payment rendered to the worker per hour as a compensation for the work done.
Calculating job time [ edit ]
The job time needs to be measured by one of the following ways: