what is Indirect Labour Cost cs executive cost and management accounting mcq notes

Posted on 15-04-2016        By ADMIN

what is Indirect Labour Cost cs executive cost and management accounting mcq notes

Indirect Labour Cost: 

The indirect employees are not directly associated with the conversionprocess but assist in the process by way of supervision, maintenance, transportation of materials,material handing etc. their work benefits all the items being produced and cannot be speciallyidentified with the individual products. Hence, the indirect labour cost should be treated asproduction overhead. These costs will be accumulated and apportioned to different cost centre onequitable basis and absorbed into product cost by applying the overhead absorption rates.Item of Labour Cost: 

The Labour cost can be analysed into the following: Monetary benefits payable immediately – Salaries and wages, dearness and the otherallowances, product incentive or bonus. Monetary benefits after sometime in the future – Employer’s contribution of P.F,E.S>I, Pension etc, Gratuity, Profit linked bonus. Non-monetary benefits (fringe benefits) – Free or subsidized food, free medical orhospital facilities free or subsidized, education to the employee’s children, free orsubsidised housing etc. 

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