Importance
Of Labor Cost
Proper
study, analysis and control of labor costs are important to all manufacturing
concern because of the following reasons.
* Labor cost is main element of cost which
covers one of the major portions of the total cost of a product or job.
* Labor cost is more difficult to control as
compared to material cost due to the involvement of human element.
* Labor cost is affected due to a change in
government policy and requirement of trade union.
* Labor cost is adversely affected due
to dissatisfaction , irregularity, inefficiency, idle time, high labor turnover, lack of interest and negative
attitude of the workers.
* Labor cost is important from the fact
that the direct labor cost is taken as the basis
of estimating the amount of factory overheads while determining the product cost.
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