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Labor costs can be considered fixed, variable or both depending on the business.
If workers are hourly (e.g., factory workers, delivery drivers, etc.), labor is generally considered variable.
If workers are on an annual salary, but are hired and fired based on production needs (e.g., floor managers, plant managers, etc.), labor can be considered variable.
If workers are on an annual salary, but are not hired and fired based on production needs (e.g., Chief Financial Officer, Director of Operations, etc.), labor can be considered fixed.
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Is labor a fixed cost?
Labor costs are fixed with respect to the price of each unit. This is because it takes the same amount of time to produce each identical unit. However, in the bigger picture labor is a variable cost. You cannot be certain how many hours people are going to work until after they do.
How do you calculate your variable cost and fixed cost given total costs and sales volumes?
Total Costs = Fixed Cost + Variable Cost soVariable Cost = Total Costs - Fixed Cost.
What happens to the value of average fixed cost as the level of output increases?
The average fixed cost is equal to fixed cost divided by level of output, if the output increases; the average fixed cost is less.
Which cost is not a fixed cost?
electricity
What is High-low method of variable cost and fixed cost?
High and low method is the method for separating fixed cost and variable cost from mixed cost.
Does total cost equal the fixed cost plus the vriable cost divides by volume?
Formula for Total Cost: Fixed Cost + Variable Cost + Semi-Variable Cost if there is no semi-variable cost then fixed cost + variable cost is a total cost. if we devide the total cost with volume as well then it will be cost per unit not total cost
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.
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.
Is indirect labor a variable cost?
If indirect labor change with the change of units of product then indirect labor is a variable cost. If change in the quantity of units has no impact on indirect labor cost then it is a fixed cost.
Is factory labor fixed cost?
It depends with the nature of labour in factory, if the labor is on daily basis or for specific number of units produced then it is variable cost but if labor has no connection with the volume of production of units then it is fixed cost as they have to pay no matter production is done or not.
Is labor a fixed cost?
Labor costs are fixed with respect to the price of each unit. This is because it takes the same amount of time to produce each identical unit. However, in the bigger picture labor is a variable cost. You cannot be certain how many hours people are going to work until after they do.
Is labor a fixed or variable cost?
Variable. Jessica Nichole Sims
Is labor always a variable cost?
It depends on the nature of payment and work, if labor is fixed and don't have any relation with the volume of production then it is fixed otherwise it will be variable.
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.
Examples of variable cost and fixed cost?
Direct labor and direct material is example of variable cost which increase with each increase of unit. Factory rent is example of fixed cost which remains fixed even in change in number of units produced.
How much does it cost to have a ebcm fixed?
Labor at parts at a local GMC dealership was $786.00.
