CMA Intermediate · Cost Accounting · Employee Costs
Which of the following is generally NOT included in the cost of labour turnover that arises from replacing a worker?
Wages paid for normal productive work are not a labour turnover cost. Turnover costs are the extra costs caused by workers leaving and being replaced, such as recruitment, training, lost output and extra scrap. Ordinary wages for productive time are regular labour cost.
- ARecruitment and training costs of the new worker
- BLoss of output while the new worker learns the job
- CWages paid to the worker during a normal, productive periodCorrect
- DIncreased scrap and defective work by inexperienced workers
Explanation
Labour turnover costs are the extra costs due to separation and replacement: recruitment, training, lost output, scrap and rework. Normal wages for productive work are ordinary labour cost, not a turnover cost.
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