Labor cost

Thank you very much dear Moffat 🙂

Yes, I already have watched your great lectures regarding this topic and I understood all the topic expect this part (Labor cost!). Sorry to confess, but I am yet a bit confuse.

Sorry dear Moffat, I dont know why the site did not allow me to post in the previous topic.

Suppose we are considering a company which makes desk. It is very obvious hat the woods used for the desks are variable. But in the case of labour , the company pays (say) 1000$ per months to workers.In one month the worker creates 10 desk and in another months he may create just 1 desk and yet he receives 1000$ at the of the month.

I mean his salary is fixed (because the worker has a signed the contract with the company to work there. It is not important for him to create 1 desk or 100 desk. so if the the salary that is paid to the worker is fixed then it is just like the salary that is paid to the supervisor. Both are fixed. So why the first one direct labor and the second indirect!

Thanks