Direct Labor Standards

Direct Labor Standards is the standard rate per hour for direct labor includes not only wages earned but also fringe benefit and other labor costs.Many companies prepare a single standard rate for all employees in a department. Direct Labor Standard rate reflects the expected “mix” of workers, even though the actual wage rates may very somewhat from individual to individual due to different skills of seniority. A single standard rate simplifies the use of standard costs and also permits the managers to monitor the use of employees within department.