430 is the unit cost.
CALCULATE UNIT COST :
Beginning work in process 500.
Direct material 800.
Direct labour 300.
Overhead (300*40%) 120.
Total cost of job 1720.
Units 4.
Unit cost 430.
What is direct labor vs indirect labor?
- Depending on the worker's contribution to the production process, labor expenses are typically divided into direct and indirect labor costs.
- While work performed on specific commodities or services is considered direct labor, employee activity that cannot be linked to or charged to the provision of goods or services is considered indirect labor.
What is direct Labour cost example?
- The hourly wage of a quality assurance inspector adjusted to incorporate healthcare benefits and short-term disability is one illustration of a direct labor cost.
- The annual wage of a welder who works on the production line of a business that makes steel parts could serve as another illustration.
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