Direct and Indirect Labor Cost.

Q37. Differentiate between direct labor cost and indirect labor cost.
Ans.

  1. Direct Labor Cost: Labor cost that is specifically incurred for or can be readily identified with a specific job, contract, work order or any unit of cost is termed as direct labor cost. Even a helper who is working on a particular job will be direct labor for that job.
  2. Indirect Labor Cost: Labor cost that is not specifically incurred or cannot be readily identified with a specific job, contract, work order or any unit of cost is termed as indirect labor cost. For example: Supervisor.

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