10 January, 15:52

# A process is replicated in another country where wages are 50 percent lower. Staffing and processing times are identical. What would be the effect on the costs of direct labor?

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Answers (1)
1. 10 January, 17:48
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1. Costs of direct labor would be 50 percent lower.

Explanation:

As we know that

The direct labor cost is comprised of the labor required for producing the product that is depended upon the wages they are getting. It deals with the wages, number of labors required, and the time is taken

In mathematically,

Cost of direct labor = Wages paid per labor or per unit * time taken * number of labors

So if the wages are 50 percent lower so it also impacts the cost of labor i. e it also lowered by 50 percent
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