Direct labor is direct cost as it varies with variation in production level and directly related with number of units of product.
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.
cost of direct labor is the total cost of workers involve in production divided by normal capacity is per unit direct labor cost.
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.
60000 + 30000 = 90000 = 60% / 60 = 1500 = 1% x 100 = 150000 = 100% X .4 = 60000 The above solution is incorrect. By definition, the conversion cost is the sum of the direct labor cost and the overhead. Therefore, if we assume x is the conversion cost, then x = 0.4x + 60,000. The solution is conversion cost = 100,000. Hence, the direct labor cost = 40,000. Note that the knowing the direct material cost is not necessary for the computation of the labor cost. I am really bad at math so i just have to think you are right on this one
Direct labor is a product cost as it is required to manufacture the units of product, Direct Labor may be a period cost in that period where there is no production but management still paying the labor all salaries and wages.
Direct labor is a product cost because it varies with the variation in production volume and without this cost no product could be manufactured and directly related with the production of goods.
Indirect labor is considered a period cost because it can't be traced by to the product. If a cost can be traced back to a product, then it is considered a 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.
false
Direct labor is direct cost as it varies with variation in production level and directly related with number of units of product.
yes A cost that attaches to the physical units is termed a product cost. Product costs would include direct materials, direct manufacturing labor, and manufacturing overhead. Conversion cost is the cost involved in converting the direct materials into a finished product. It is composed of direct manufacturing labor and manufacturing overhead. Any cost that does not attach to the physical units would be termed a period cost and would be expensed as incurred. Therefore, a cost is either a period or a product cost. Electricity cost, whether variable or fixed, would be included in manufacturing overhead and classified as conversion costs, and therefore cannot be classified as a period cost.
Direct material is a product cost because without material no product can be produce and it has direct relation with production of goods.
direct labor is that labor which directly involve in production of goods of product and separately identifiable with cost.
Product costs is the costs are the costs incurred in the making of the product. Manufacturing costs --Direct Materials, Direct Labor, and Manufacturing Overhead. Product cost are also factory costs Period costs are the selling and administration costs. Electricity costs for the Accounting dept. is an administration costs but Electricity costs for the factory is Manufacturing Overhead.
Formula for prime cost is as follows: prime cost = direct material + direct labor So according to above mention formula yes it is prime cost because whitout labor no unit of product can be manufactured.
Average direct labor cost is the opening direct labor cost + closing direct labor cost / 2