Only direct material and direct labor is part of prime cost while overheads are part of conversion cost so indirect labor is part of overheads so automatically part of conversion cost and not prime cost.
Direct material and direct labor are the parts of prime cost while indirect labor is part of manufacturing overhead and manufacturing overhead is a part of conversion cost that's why indirect labor is not part of prime cost because it is that type of labor which is not directly identifiable with units production that;s why cannot charge directly to production units.
Indirect labor is that kind of labor which is not directly involved in making of unit of product that's why it is not a direct labor and that's why it is not prime cost of unit of product and that's why it is shown in overheads
Indirect cost rate is equal to Indirect Cost Pool divided by Indirect Cost Allocation Base.
Indirect cost rate is equal to Indirect Cost Pool divided by Indirect Cost Allocation Base.
Prime cost = direct materials + direct laborwhile conversion cost = direct labor + factory overhead( which includes indirect materials, indirect labor and other indirect costs
Only direct material and direct labor is part of prime cost while overheads are part of conversion cost so indirect labor is part of overheads so automatically part of conversion cost and not prime cost.
prime costs only includes direct cost like direct material and direct labor.
Direct material and direct labor are the parts of prime cost while indirect labor is part of manufacturing overhead and manufacturing overhead is a part of conversion cost that's why indirect labor is not part of prime cost because it is that type of labor which is not directly identifiable with units production that;s why cannot charge directly to production units.
Indirect labor is that kind of labor which is not directly involved in making of unit of product that's why it is not a direct labor and that's why it is not prime cost of unit of product and that's why it is shown in overheads
Indirect cost rate is equal to Indirect Cost Pool divided by Indirect Cost Allocation Base.
Indirect cost rate is equal to Indirect Cost Pool divided by Indirect Cost Allocation Base.
If indirect labor change with the change of units of product then indirect labor is a variable cost. If change in the quantity of units has no impact on indirect labor cost then it is a fixed cost.
Research and development cost is indirect cost as this cost is not directly required to manufacturing the production units and that’s why always an indirect cost.
indirect
Indirect
yes cost function measures the direct costs along with indirect cost.