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What is direct labor?

Direct labor refers to the employees and temporary help who work directly on a manufacturer's products. (People working in the production area, but not directly on the products, are referred to as indirect labor.)

The direct labor cost is 1) the cost of the wages and fringe benefits of the direct labor employees and 2) the cost of the temporary help who work directly on the manufacturer's products.

The direct labor cost is also defined as: