Direct labor hours is time spent by individuals who work specifically on manufacturing a product or performing a service. In contrast, indirect labor hours is the time spent by individuals involved in supervising or supporting the process of manufacturing a product or performing a service. For example, in a car manufacturing plant, direct labor is defined as those individuals who directly work on the car products (i.e., physically use the production equipment to make cars). Indirect labor in a car manufacturing plant would involve line supervisors, machine maintenance staff, plant security personnel, etc. Traditionally, the direct labor hours measure is often used to determine the cost of support overhead activities to assign to products.
See Activity-based costing; Cost analysis for purchasing; Direct labor costs
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© 2000 Kluwer Academic Publishers
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(2000). DIRECT LABOR HOURS . In: Swamidass, P.M. (eds) Encyclopedia of Production and Manufacturing Management. Springer, Boston, MA . https://doi.org/10.1007/1-4020-0612-8_245
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DOI: https://doi.org/10.1007/1-4020-0612-8_245
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