Depreciation of manufacturing equipment is fixed cost because that cost will incurred no matter how much units produced.
Only depreciation for all those fixed assets which directly involve in manufacturing of production volume is part of direct cost while all other depreciation is not part of direct cost and included in indirect cost classification.
Fixed manufacturing cost is treated as period cost because it has to be incurred no matter there is any production or not like machinery depreciation or building depreciation etc these kinds of costs cannot be eleminate in short run.
a.k.a. Absorption Costing, is a method that includes direct manufacturing costs as well as indirect manufacturing costs such as machine depreciation and factory. (GAAP Required)
as much as the union wants it to be
Average direct labor cost is the opening direct labor cost + closing direct labor cost / 2
Direct labor cost is that labor which directly related with manufacturing of products like machine workers etc while indirect labor cost is that labor cost which directly not manufacturing product but required as well like line mangers or factory supervisors salary etc.
yes. The plant is used in the manufacturing process and tehrefor it is a direcct cost d
Formula for prime cost = direct material + direct laborFormula for conversion cost = direct labor + manufacturing overheads
The capital-intensive nature of paper manufacturing means that cheaper overseas labor has less of an impact on manufacturing costs than in other, more labor-intensive industries.