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Generally, it would be considered a fixed cost, but it depends upon how employees are paid. If you pay employees a piece rate (say $1 for every doorknob that was polished) then labor costs would be variable, but if you pay your employees a salary, then it would be fixed (Fixed does not mean, however, that costs would never change. You must take into account overtime or the need to higher additional employees if productions went above a certain point)
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Is direct material and labor a fixed cost?
If direct material and direct labor remains fixed irrespective of production volume then these are fixed costs otherwise these are variable costs and normally these are variable costs because it varies with the production volume.
Examples of semi variable direct costs?
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.
What is the differences between Fixed Direct labor with variable direct labor?
Direct labor which do not vary with level of production is fixed direct labor while labor vary with change in production is variable direct labor.
Please can you tell me whether labor costs may be both fixed and variable costs?
Labor cost can be fixed as well as variable. That labor which varies with changes in level of production then it is variable cost but if labor remain fixed then it is fixed cost.
Are direct costs variable costs?
If direct labor don't change with number of units product then it is fixed cost but if it changes with the change in production units then it Is variable cost.
What is on overhead?
Overhead refers to the cost of a business in a particular period. Specifically, overhead points to fixed and indirect costs. They are non-labor costs. Non-labor costs are variable or fixed. Rent and salaries are examples of fixed costs. Advertising and supplies are variable costs.
Assuming that direct labor is a variable cost product costs under variable costing include only?
B. Direct materials, direct labor, and variable manufacturing overhead.
Is direct labor a fixed cost?
If salary or wage of direct labor workforce is fixed irrespective of number of units manufactured by them then it is fixed cost other wise it is variable cost.
Is direct labor fixed Cost?
If salary or wage of direct labor workforce is fixed irrespective of number of units manufactured by them then it is fixed cost other wise it is variable cost.
Which costs may have both variable and fixed components?
Labor. Fixed rate for hours planned; variable rates for unscheduled overtime.
Is direct labor a variable cost or product cost?
Direct labor is variable cost as well as product cost but for variable cost it must vary with the change in production level otherwise it will be fixed cost.
How can manager decrease variable costs while increaseing fixed cost?
This is generally done in areas such as manufacturing where processes can be more automated. By investing in machines and facilities, the fixed costs will increase, but variable labor costs will decrease.
