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Labor Cost, Direct Labor Cost and Indirect Labor Cost

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Labor cost refers to the total amount of money that a business spends on employee wages, benefits, and other related expenses. This includes both direct and indirect labor costs. Direct labor cost refers to the wages and benefits paid to employees who are directly involved in producing a product or delivering a service. These employees are directly responsible for the conversion of raw materials into finished goods or the provision of a service. For example, in a manufacturing company, direct labor costs would include the wages paid to workers who operate machines or assemble products. Indirect labor cost, on the other hand, refers to the wages and benefits paid to employees who are not directly involved in the production process, but whose work is still necessary to support the production process. These employees may be involved in tasks such as maintenance, cleaning, quality control, or supervision. For example, in a manufacturing company, indirect labor costs would include the wages...
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Cost esimation, cost accounting and costing

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 Cost estimation, cost accounting, and costing are three related but distinct concepts used in business and accounting. Here is a brief description of each: Cost estimation: Cost estimation is the process of estimating the costs associated with a particular project or activity. It involves identifying all the direct and indirect costs involved in a project or activity, and estimating the total cost based on various assumptions, such as the scope of the project, labor rates, material costs, and other relevant factors. Cost estimation is important for budgeting and planning purposes, and is used in a wide range of industries. Cost accounting: Cost accounting is the process of tracking and analyzing the costs associated with producing a product or providing a service. It involves identifying all the direct and indirect costs associated with a particular product or service, and assigning those costs to different categories such as materials, labor, overhead, and other expenses. Cost ac...
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Overhead Cost, Burden Cost

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  Overhead Cost, also known as indirect cost, is the cost that cannot be directly attributed to a specific product or service. It includes the cost of resources that are used to support the production process, but do not directly contribute to the final product. Examples of overhead costs include rent, utilities, insurance, depreciation of equipment, and salaries of administrative staff. Overhead costs are necessary for the smooth running of a business, but they do not have a direct impact on the production process. Therefore, they are allocated to the products or services based on an overhead allocation rate. This rate is calculated by dividing the total overhead cost by the total number of units produced or the total number of labor hours worked. The allocation of overhead cost is important because it helps businesses to accurately calculate the total cost of a product or service. It also helps to determine the profitability of each product or service, and to make informed decisi...
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Components and elements of Cost

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  Prime Cost: Prime Cost is the sum of all the direct costs involved in the production of a product. It includes the cost of raw materials, labor, and any other expenses directly related to the manufacturing process. The formula to calculate prime cost is: Prime Cost = Raw Material Cost + Direct Labor Cost + Direct Expenses Factory Cost: Factory Cost is the sum of all the direct and indirect costs involved in the production of a product. It includes the cost of raw materials, labor, and any other expenses directly related to the manufacturing process, as well as indirect costs such as factory rent, maintenance, and depreciation of machinery. The formula to calculate factory cost is: Factory Cost = Prime Cost + Manufacturing Overhead Expenses Production Cost: Production Cost is the total cost involved in the production of a product, including both direct and indirect costs. It includes the cost of raw materials, labor, and any other expenses directly related to the manufacturing pro...
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Cost break up sheet ( per operation cost )

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  Cost break up sheet  To find the cost of any operation We should know about the various factors that are indulged to complete a specific type of operation Here is a list of factors that specify the cost of a particular type of product 1. Cost of machine on which we have to prepare our product 2. Life span of the machine so that we can calculate the depreciation value of the machine 3. Production rate of the machine  4. Area in square feet which is being used to complete that operation. 5. Rent of that area per square feet. 6. Unskilled labour wages in that area. 7. Number of unskilled workers working there to complete that operation. 8. Skilled manpower wages in that area. 9. Number of unskilled workers working there to complete that operation. 10. Power charges in that area 11. What is the machine power consumption rate ? 12. What is the power consumption per minute, per hour, per shift, per day, per month and per year ? 13. What other electrical appliances like light,...
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SOLIDWORKS basic question answers FAQs for interview purpose

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  SOLIDWORKS Some of the FAQs from the parts section of Solidworks. 1. What type of software is Solidworks? Answer:- This is a 3D software means this 3 Dimensional software in which we can work in all three directions using all three axes (x, y, z). 2. Solidworks is the software of which company? Answer:- This is a very successful software developed by a company named Dassault Systems, which helps a lot in designing. 3. What can we do in Solidworks software? Answer:- We can do mainly 3 things in this software.  Can make parts or part drawing or can prepare assembly by joining 2 or more parts or can make a drawing of parts and their assemblies or can do their drafting work. 4. What other things can we do in Solidworks software other than drafting drawings? Answer:- In this software, we can prepare our design and prepare its working mechanism. 5. Which command is used by Solidworks software to convert the 2D figures to 3D? Answer:- We convert a 2D figure to...
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FEASIBILITY STUDY FORMAT

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FEASIBILITY STUDY   FORMAT AND STUDY OF PROJECT HANDLEBAR Before laying any new setup for production, it is always better to check that the product we are going to manufacture is feasible for us to manufacture or not.? So to check the feasibility of any new line setup, some points are to be checked so that we can take the decision easily whether we are capable of producing a particular type of product or not. Can we fulfill the customer requirement as per their demand? So to check the feasibility of any product, some points need to be checked, so with example of handlebar, this is a small effort to make you understand the format of feasibility study.  To see video in hindi, kindly go through this link:-      https://youtu.be/yWToDA2prs4
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