ECONOMICS

Detailed explanation-1: -Wages paid to the workmen engaged in machine shop, assembly shop, etc., are examples of direct labour cost. Indirect labour costs are not identifiable with the production of specific goods or services.

Detailed explanation-2: -Direct costs generally include: Salaries are wages (including vacations, holidays, sick leave, and other excused absences of employees working specifically on objectives of a grant or contract – i.e, direct labor costs). Other employee fringe benefits allocable on direct labor employees.

Detailed explanation-3: -Wages paid to workers. Workers are the people who are producing the material and directly associated with production activity. Such wages is a direct expenses.

Detailed explanation-4: -Are employee wages direct or indirect costs? Whether employee wages are classed as direct or indirect costs depends on the employee’s role and the service they provide for you. Direct labour (labour involved in the hands-on production of goods and services) is classed as a direct cost.

Detailed explanation-5: -Direct costs examples include direct labor and direct materials. Although direct costs are typically variable costs, they can also be fixed costs. Rent for a factory, for example, could be tied directly to a production facility.