Table of Contents
Direct Labour / Labour
Definition of Direct Labour:-
Direct labour is that labour which can be readily identified with a specific job, contract or work order. It includes:
- All labour directly engaged in converting raw materials into finished goods or in altering the construction, composition or condition of the product.
- Any other form of labour which is incurred wholly or specifically for any particular job, contract or work order.
Features
The main features of direct labour are:
- It can be easily identified with a specific job, contract or work order.
- It varies directly with the volume of output.
Treatment
Wages paid to direct labour are termed as ‘direct labour cost’ and form part of prime cost.
Examples of Direct Labour
- Weaver in weaving unit
- Carpenter in furniture unit
- Tailor in ready made wears unit
- Baker in baking unit
- Washer in dry cleaning unit
- Labour employed on construction contract