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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › direct vs indirect labour cost
Hello tutor, I have a question related to labour cost classification of a company called Furniture Co:
“Pay for hours spent delivering orders to customers”
I do not understand why this cost is classified as inderect cost althought the action should be conducted by direct labour on a normal basis.
Thank you tutor!
Direct costs are those spend producing goods.
Cost of delivering to customers are indirect because they are not spent on production.
Thank you tutor for your answer!
You are welcome 🙂