Direct labor costs are salaries paid to employees directly involved in manufacturing a product or providing a service, while indirect labor costs refer to those not on the direct production line. Dividing workers by their contribution to direct or indirect labor costs helps determine total cost. To calculate direct labor costs, a company must analyze factors such as wages per unit of production and desired price for each product.
The direct labor costs are the part of the appointment of a company that is destined for the salaries of the employees who are directly involved in the manufacture of a product or the provision of a service. They are distinct from indirect labor costs, which refer to the salaries of those associated with the creation of the product but not on the direct production line, like machine repair technicians. Understanding direct labor costs is an important part of creating a business assumption and business cost analysis.
The best way to determine if the salary of an employee in particular contributes to the direct labor costs is to ask if he could make a specific product or provide a service without his job. A person who installs doors in a car is part of the direct work line, therefore, the car will not be terminated. In a cleaning business, a child who goes to work would be considered direct work, but since then, the house will not be cleaned. Those involved in indirect labor costs can facilitate the process, like administrators who contract jobs or personnel who sell a product, but the product or service could exist without them.
Dividing the workers by their contribution to the direct or indirect labor costs helps determine the total cost of a service or product. Por ejemplo, si bien todas las empresas pueden necesitar administradores, conserjes y otros trabajadores indirectos, la cantidad de trabajadores y salarios queridos puede ser diferente si una empresa matura ositos de cuddly toys or muñecas bebés. For a juguetes company to decide which product to manufacture, it will have to consider the costs of the material in addition to the costs of the hand of the direct work in comparison with the anticipated wages. If plush toys can be made for direct costs considerably cheaper, they can provide a greater margin of benefit for the company and, therefore, be a better option.
To calculate direct labor costs, a company must analyze various factors, including the cost of wages per unit of production and the desired price for each product. If a company would like to have 100 stuffed toys per week and each completed, they can make one stuffed toy per hour, if they need 100 hours to fill with this item. When multiplying the cantidad of hours necessary for the salary per hour of the employees who manufacture the bones, the company will know how much the hand of the direct work requires to make 100 plush bones per week. Therefore, if you have two empleados that work 50 hours per week and if you pay them $10 US dollars (USD) per hour, the direct labor costs of making 100 plush toys could be expressed as: 2 empleados X 50 hours X $10 USD = $1000 DÓLAR ESTADOUNIDENSE.
Active smart.
Protect your devices with Threat Protection by NordVPN
