Lake Appliance produces washers and dryers in an assemblylin

Lake Appliance produces washers and dryers in an assembly-line process. Payroll costs incurred during a recent period were: corporate executives, $570,000; assembly-line workers, $230,000; security guards, $50,000; and plant supervisor, $180,000. The total of Lake\'s direct labor cost was

Solution

Total of Lake\'s direct labour cost is $ 230,000. (i.e, wages to assembly-line workers only).

Wages to corporate executives, security guards, and plant supervisor are not directly involved in the production activities. Hence these are not classified as direct labour cost.