Accounting · Cost Sheet and Labour Classification

Consider the following statements regarding the classification and treatment of labour costs in the preparation of a Cost Sheet: Statement 1: Direct labour involves remuneration paid to support personnel such as supervisors, storekeepers, and maintenance workers, and it is accounted for as a primary component of the Prime Cost. Statement 2: Indirect labour consists of workers who support the production process but are not directly engaged in converting raw materials into finished goods, and these costs form part of the Factory Overheads.