Question

Wages paid to inspectors, factory accountants, and plant supervisors are classified as __________ __________, while wages paid to painters, machine operators, and assemblers are classified as __________ __________.

Answer 1

Answer:

Indirect Labour Cost, Direct Labour Cost

Explanation:

Direct Labour Cost

This is the type of cost incurred or wages paid to workers or employees that directly works on project. For example, laborer, foreman, painters, machine operators, delivery man etc. all belongs to this category. They are wages paid to the category of employees or workers who physically produce products.

Indirect Labour Cost

These are wages paid to those group of workers or employees that perform tasks that do not directly contribute to the production of goods or performance of services. For example, we have accountants, security guards, administrative officers, supervisors, inspectors and so on. It is also known as Overhead cost. They are not involved in the active part of conversion of raw materials into products.