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Pros/cons of Direct Labor as Variable Cost

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Businesses today (GE, H-P, Sun) are transforming labor into a more flexible (and variable) cost.

Discuss whether direct labor is a fixed or variable cost. (I'm pretty sure it's variable).

What are the pros and cons of management treating direct labor as a variable cost?

Are there ethical issues to be considered here?

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Businesses today (GE, H-P, Sun) are transforming labor into a more flexible (and variable) cost.

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Discuss whether direct labor is a fixed or variable cost. (I'm pretty sure it's variable).

Variable costs are costs which changes directly in proportion to the level of sales in dollars or units sold. For example direct material, direct labor, sales commission, bonus etc.
Fixed costs are those costs which remain the same irrespective of the production or sales level.

Direct labor cost can be either fixed or ...

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