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Indirect labor costs make the production of cost objects possible, but aren't assigned to a specific product. For example, clerical assistants who help maintain the office support the company as a whole instead of just one product line. Thus, their labor can be counted as an indirect cost. Other common indirect costs include advertising and marketing, communication, fringe benefits such as an employee gym, and accounting and payroll services. Much like direct costs, indirect costs can be both fixed and variable.
However, in direct labor cost calculations, companies should watch out for variance in efficiency and rate of labor. Definition. Direct labor cost is essentially the work related expenses that can be attributed to the actual manufacturing of a product/good.In case of service industry, direct labor cost is referred to the labor cost needed for providing a particular service.Thus, direct labor cost does not involve employees who are not involved in the production, like office and administrative staff members.owever, in direct labor cost calculations, companies should watch out for variance in efficiency and rate of labor. Definition. Direct labor cost is essentially the work related expenses that can be attributed to the actual manufacturing of a product/good.