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How to Calculate Direct Labor Cost.
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How to Calculate Direct Labor Cost.

Rosemary Njeri

Direct labor refers to the salaries and wages paid to workers that can be directly attributed to specific finished products.

Identifying the individual cost factors that are attributed to produce a product is important in assessing labor inputs.

Formula to calculate direct labor cost.

Calculate Direct Labor Cost.

Example:

Suppose you employ a direct labor workforce of 5 people, who work 40 hours per week, and they earn an average of $20 per hour. Calculate the direct labor cost of each of the employee in a week.

 Calculate Direct Labor Cost.

Therefore, the direct labor cost is $ 800.

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