direct labor
work of factory employees that can be physically and directly associated with converting raw materials into finished goods
Direct labor refers to the time and effort put in by employees who are directly involved in the manufacturing or production process of a product or service. This includes workers who physically handle materials, machines, or tools to create a product. Direct labor costs are the costs associated with paying these employees, including their salaries, wages, benefits, and any additional payroll expenses.
Direct labor is an essential cost component of a product or service. By understanding the amount of time and effort required by direct labor, companies can make informed decisions about staffing levels, training programs, and production efficiency measures. Moreover, direct labor costs have a direct impact on a company’s profitability, making it crucial for businesses to manage effectively.
In summary, direct labor refers to the cost of the work done by employees that is directly related to the manufacturing or production process. Proper management of direct labor costs plays a critical role in a company’s ability to operate efficiently and be financially successful.
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