Some companies classify labor fringe benefits for direct labor workers as part of the direct labor cost and some classify these costs as manufacturing overhead.

Question

Quizplus · Accepted Answer

It depends on the specific company's accounting practices and policies. Some companies may include labor fringe benefits (such as health insurance, retirement contributions, etc.) as part of the direct labor cost, while others may classify them as part of manufacturing overhead. It is important to consult the company's accounting policies and procedures to determine how these costs should be classified.

Some Companies Classify Labor Fringe Benefits for Direct Labor Workers