Question

Which of the following would not be considered a direct labor cost in a service firm that uses job-order costing?

a. The salary of a surgeon at a hospital.
b. The salary of an attorney at a law firm.
c. The salary of the manager at a hair salon.
d. The wages of technicians at an auto repair shop.

Answer 1

The salary of the manager at a hair salon would not be considered a direct labor cost in a service firm using job-order costing as managers generally perform indirect labor by overseeing operations rather than directly contributing to specific jobs or services.

Step-by-step explanation:

The question asks which of the following would not be considered a direct labor cost in a service firm that uses job-order costing:

• The salary of a surgeon at a hospital.
• The salary of an attorney at a law firm.
• The salary of the manager at a hair salon.
• The wages of technicians at an auto repair shop.

The salaries of the surgeon, the attorney, and the wages of the technicians are all examples of direct labor costs because these professionals are directly working on providing the service that generates revenue.

However, the salary of the manager at a hair salon would typically not be considered direct labor since managerial positions are generally classified as indirect labor; they do not contribute directly to specific jobs or services but rather oversee operations.