Give an example of indirect labor and where are they located

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Indirect labor is that which is not directly involved in the active conversion of materials into finished products. Indirect labour cost is the cost of any labor that supports the production process.

"Labour employed to perform work which is incidental to production of goods or/and those who are engaged for office work, selling & distribution activities are known as 'indirect labour'. Any amount of wages paid to such workers are known as 'indirect wages' or indirect labour cost."

Examples of indirect labor positions are: Production supervisor. Purchasing staff

Indirect labour is located in Profit & loss accounts under Wages/salary expense account (i.e not in Trading, Manufacturing Account). Salary paid to indirect labour shall not become part of Cost of goods sold.

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Question

Give an example of indirect labor and where are they located

Solutions

Expert Solution

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