What Is Direct Labor?

Direct labor refers to the wages, allowances, subsidies, welfare benefits, and social security of workers who are directly engaged in the production of products in the process of producing products and providing labor services.

Direct labor

Right!

Direct labor means

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What actually happens to achieve actual production or as a quantity

Direct labor rate difference = actual output × actual working hours per unit of product × (real wage rate standard wage rate)

= (Actual wage rate-standard wage rate) × actual working hours

For example: Xinxin Machinery Factory needs car processing to process A product. The standard wage rate is 5 yuan / hour, the actual wage rate is 6 yuan / hour, the standard hour is 500 hours, and the actual hour is 450 hours. Wage rate differences and efficiency differences.

Direct labor cost variance = actual labor cost-standard labor cost

= 6 × 4505 × 500 = 200 (yuan) (U)

The 200 yuan deficit consists of the following two parts:

Direct labor wage rate difference = (6-5) × 450 = 450 (yuan) (U)

Direct labor efficiency difference = (450-500) × 5 = -250 (yuan) (F)