CHAPTER 6
Analysis of Direct Labor Costs
This chapter gets into the detail of how we analyze direct labor costs. It is important that we have a thorough understanding of what direct labor is before we proceed.
The cost for labor is the money expended by a company for a major resource, the people who work for it. This extends from the president of the firm, whose salary is an expense to the company, on through all its company officers and down to everyone who works for the company.
This cost of labor involves more than just the pay of employees. The company incurs added expense simply by having people on the payroll. It has to pay Social Security or FICA taxes and federal and state unemployment taxes. In addition, the company pays numerous other ...
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