ECONOMICS

Detailed explanation-1: -Direct labour cost consists of wages paid to workers directly engaged in converting raw materials into finished products.

Detailed explanation-2: -Direct labor costs are the wages, benefits, and insurance that are paid to employees who are directly involved in manufacturing and producing the goods – for example, workers on the assembly line or those who use the machinery to make the products.

Detailed explanation-3: -Costs are broadly classified into four types: fixed cost, variable cost, direct cost, and indirect cost.

Detailed explanation-4: -The cost of wages paid to employees directly involved in converting materials to finished product is classified as direct labor cost.

Detailed explanation-5: -Direct Costs A direct cost includes raw materials, labor, and expense or distribution costs associated with producing a product. The cost can easily be traced to a product, department, or project. For example, Ford Motor Company (F) manufactures cars and trucks. A plant worker spends eight hours building a car.