Question

In a manufacturing company, the cost of factory labor consists of all of the following except __________.a. net earnings of factory workers. b. gross earnings of factory workers. c. employer payroll taxes. d. fringe benefits incurred by the employer.

Answer 1

Answer:

a. net earnings of factory workers

Explanation:

• As the total factory cost is equal to the total direct material and plus the direct labour plus the factory overhead. The direct labour is involved in the production of the goods.

• And most of the labour production is needed to produce a minimum number of staffing to the production area and should be considered as an overhead cost with the unit of production.

• For an example of a worker is paid a free piece-rate wage this can be considered as direct labour for each unit of manufacturing.