If wages are paid of those workers which directly related with the manufacturing or units then wages are part of prime cost otherwise it is part of conversion cost.
Direct labor wages are normally Variable costs, charged directly to the Production Cost Account, what is commonly called WIP. It is commonly held that direct labor wages change proportionally to the changes of the production level. In fact, however, hourly wages are only related to a time unit, not to pieces produced. True direct wages are piece-work wages, but very few industries pay their workers by unit of production. We should have the option to treat a direct labor wage as a fixed cost, just as salary is a fixed cost. Monthly or hourly, these payment are paid by time interval, not by production unit
An example of a monthly fixed cost for a sandwich soap is the monthly rent or the wages that they pay monthly.
An example of semi variable direct costs is wages. Since semi variable costs are partially fixed and variable, regular labor is fixed costs, as production rises and workers have overtime the overtime is considered the variable cost.
Yes. Variable cost varies with the activity of the business. Unless the wage given is in accordance with the activity level for e.g. piece rate, then it should be fixed cost.
fixed wages and prices
wages are variable cost reason being is that wages are being used over and over again and does not remain constant.
If wages are paid of those workers which directly related with the manufacturing or units then wages are part of prime cost otherwise it is part of conversion cost.
Direct labor wages are normally Variable costs, charged directly to the Production Cost Account, what is commonly called WIP. It is commonly held that direct labor wages change proportionally to the changes of the production level. In fact, however, hourly wages are only related to a time unit, not to pieces produced. True direct wages are piece-work wages, but very few industries pay their workers by unit of production. We should have the option to treat a direct labor wage as a fixed cost, just as salary is a fixed cost. Monthly or hourly, these payment are paid by time interval, not by production unit
An example of a monthly fixed cost for a sandwich soap is the monthly rent or the wages that they pay monthly.
An example of semi variable direct costs is wages. Since semi variable costs are partially fixed and variable, regular labor is fixed costs, as production rises and workers have overtime the overtime is considered the variable cost.
No, wages are typically considered a variable cost because they fluctuate based on factors such as the number of hours worked and the rate of pay. Fixed costs, on the other hand, do not change with the level of production or sales.
The workers who produce these goods are paid better wages.
Yes. Variable cost varies with the activity of the business. Unless the wage given is in accordance with the activity level for e.g. piece rate, then it should be fixed cost.
direct labor cost is total wages and salaries of workers divided by production at normal capacity.
Direct labor cost is the total cost of salaries and wages paid to workers / number of units to be manufactured for normal capacity
Cost-push inflation states that increasing wages for workers drives up the cost of production, forcing producers to charge more to meet their costs.