direct labor cost

Definition

The portion of the total cost of production of a product or fulfillment of a service that is associated with salaries, benefits, taxes, and other expenses related to the personnel needed for the process. This does not include indirect labor costs such as accounting, human resources, or other administrative functions that support the process or personnel.

Use direct labor cost in a sentence

The direct labor cost was not as high as I thought it was going to be and I knew that things were going to work out.

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The direct labor cost was low enough that the chief executive officer was able to realize tremendous profits from the project.

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After reviewing the direct labor cost on their balance sheet, the executives at ABC Company decided they could afford to hire 10 more warehouse employees.

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direct issuer manufacturing cost