Direct Labor Cost
Direct labor cost is essentially the work related fixed cost that can be attributed to the actual manufacturing of a product/good. In case of service industry, direct labor cost is referred to the labor cost needed for providing a particular service. So, direct labor cost does not involve employees who are not involved in the production, like office and administrative staff members. It only consists of personnel who are responsible for setting up as well as maintaining the equipment.
Measuring Direct Labor Cost in Job Order Costing System: Learning objective of this article: What is a labor time ticket? Give an example of labor time ticket. How direct labor cost is measured and recorded on job cost sheet in a job order costing
Cost Classification as Manufacturing and Non-manufacturing: Learning objectives of this article: Define and explain manufacturing and non-manufacturing costs. What is the difference between manufacturing and non-manufacturing costs costs? Identify and give examples of each of the three basic manufacturing cost categories. Manufacturing firms are
Conversion Cost Definition: Conversion cost is equal to direct labor cost plus manufacturing overhead cost. In equation form: Conversion Cost = Direct Labor Cost + Manufacturing Overhead Cost