Direct labor cost is the salaries and wages of all workers directly involved in manufacturing of goods.
Salaries and wages of workers directly involve in goods manufacturing is direct labor cost.
direct labor
Direct labor are not part of overhead costs and shown separately while indirect labor are part of overhead costs and included in overhead cost because those labor cannot be allocated separately or identifiable separately.
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.
Prime cost basically is the cost of direct labor and cost of direct material; whereas conversion costs is Overhead cost and direct labor cost.
Salaries and wages of workers directly involve in goods manufacturing is direct labor cost.
direct labor
Direct labor are not part of overhead costs and shown separately while indirect labor are part of overhead costs and included in overhead cost because those labor cannot be allocated separately or identifiable separately.
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.
it is direct labor plus overhead costs
Prime Costs: Prime costs are those costs which are prime importance for making any product and include: Prime Cost = Direct Material + Direct Labor
Factory manager is not directly related to the production of units of product so it is not direct labor cost but it is included in overhead costs.
Prime cost basically is the cost of direct labor and cost of direct material; whereas conversion costs is Overhead cost and direct labor cost.
Predetermined overhead rate based on direct labor cost = Budgeted overhead cost / direct labor cost / 100 Predetermined overhead rate based on direct labor cost = budgeted overhead cost / direct labor hours.
Formula for prime cost = direct material + direct laborFormula for conversion cost = direct labor + manufacturing overheads
Indirect costs(salaries, materials not directly involved in manufacturing), period costs(selling and admin costs)
B. Direct materials, direct labor, and variable manufacturing overhead.