Labor costs in manufacturing can be:
A) Direct or indirect.
B) Indirect or sunk.
C) Direct or payroll.
D) Indirect or payroll.
E) Direct or sunk.

Question

Quizplus · Accepted Answer

Labor costs in manufacturing can be categorized as either direct or indirect. Direct labor costs are the wages or salaries paid to employees who directly work on producing the products, while indirect labor costs are the wages or salaries paid to employees who do not directly produce products but instead support the production process (e.g. maintenance workers, supervisors, etc.). Therefore, choice A is the correct answer. The other choices either combine direct and indirect labor costs with other concepts (e.g. sunk costs, payroll) or present incorrect categorizations of labor costs.

Labor Costs in Manufacturing Can Be