Cost  elements  for labor / worker

Two types of labour are accounted  for labor cost

Direct  - Could be traced and can be linked to a specific   job for a specific product .

Indirect  -  It could not be associated with any specific product


Elements for cost of labour

  • Salary or wages
  • Workers / Employees  taxes
  • Employer taxes and fringe benefits
  • Shift premiums
  • Overtime
  • Idle time
  • Incentive plans




Cost of  labour  turnover

Preventive  cost
The cost companies pays to retain  worker/ employees  from leaving  are mentioned below


  • Medical and housing facility
  • Benefit like pension  gratuity  and bonus
  • Educational facility for employees children
  • Good working condition
  • Welfare schemes


Replacement cost

  • Cost of hiring
  • Cost of training
  • Cost of wastages
  • Cost of defectives


More on  Manufacturing Costing

Product Costing
Material Cost
Labor Cost
Factory  Overhead Cost
Cost  of  Labour
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