Classifying labour costs
In this lesson, you'll learn how to classify labour costs by function and type—a key skill for Performance Management and Advanced Performance Management exams. You'll discover the difference between production and non-production labour, and crucially, how to distinguish between direct and indirect labour costs.
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In this lesson
- 0:00 Labour cost classification overview
- 0:51 Direct versus indirect production labour
- 1:59 Hourly paid workers and accounting treatment
- 2:30 Overtime classification and premium elements
- 4:00 Non-production activities and indirect costs
- 4:42 Indirect labour cost treatment and exceptions
About this lesson
The video walks you through the practical rules for classifying hourly-paid workers, including how to treat overtime premiums (which can be direct or indirect depending on whether the work is general or customer-specific), and how non-production activities are always classified as indirect. By mastering these classifications, you'll be able to correctly code labour costs in your accounting system and handle the exam questions that test this understanding.
Duration: 6m
Transcript
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