Labour Cost

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“Labour Cost, representing the human contribution to production, is an important cost factor which requires constant control, measurement and analysis.”

 

A rational approach to the problems of labour, fair maintenance of wage records for wage ascertainment, fair wage policy, and the incentives for earning more wages go a long way in providing a sense of security and stability to the workmen, in minimizing the labour turnover, and in exercising effective labour cost control.

 

Labour cost control aims at the control of the labour cost per unit of production and not at the reduction of the wage rates of the workmen.

 

Efficiency of labour (a concept meaningless to material) has an important impact on the successful working of a business.

 

Labour cost is second major element of cost. Proper control and accounting for labour cost is one of the most important problems of a business enterprise. But control of labour cost presents certain practical difficulties unlike the control of material cost.

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