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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.
Both direct labor costs and indirect headcount costs can be fairly effective in providing financial analysis so long as they are calculated according to their respective areas of the product creation process. Direct labor costs must be solely devoted to manufacturing costs and the labor performed by production workers. Indirect headcount cost analysis can prove to be effective in nonproduction calculations, but it can be used in cost analysis of direct labor too, even though it is not normally used in that context.