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It depends with the nature of labour in factory, if the labor is on daily basis or for specific number of units produced then it is variable cost but if labor has no connection with the volume of production of units then it is fixed cost as they have to pay no matter production is done or not.
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Examples of variable cost and fixed cost?
Direct labor and direct material is example of variable cost which increase with each increase of unit. Factory rent is example of fixed cost which remains fixed even in change in number of units produced.
Please can you tell me whether labor costs may be both fixed and variable costs?
Labor cost can be fixed as well as variable. That labor which varies with changes in level of production then it is variable cost but if labor remain fixed then it is fixed cost.
Is the cost of a new factory an example of a fixed cost?
yes it is an example of fixed cost
Is direct labor a fixed cost?
If salary or wage of direct labor workforce is fixed irrespective of number of units manufactured by them then it is fixed cost other wise it is variable cost.
Is direct labor fixed Cost?
If salary or wage of direct labor workforce is fixed irrespective of number of units manufactured by them then it is fixed cost other wise it is variable cost.
