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Managerial accounting Labour cost is a significant element of cost specially in an organisation using more manual operations. It is the cost of human endeavour

Managerial accounting Labour cost is a significant element of cost specially in an organisation using more manual operations. It is the cost of human endeavour in the product and requires coordinated efforts for its control. The management objective of keeping labour cost as low as possible is achieved by balancing productivity with wages. Low wages do not necessarily mean low labour cost. Low labour cost is possible by giving substantial increase in wages against corresponding increase in productivity. The gain is reflected both in labour cost as well as in overheads expense per unit, since overheads are distributed over larger volume. Again, the productivity of labour is quite flexible. Given right type of motivation and incentive, it can reach amazing scale. It does not have any limitation like machines

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