cheduled and actually used to support the operation and the production schedule. An example of the difference between the conventional method and the use rate method: In a Just in Time environment, batch sizes have moved down and frequency of movement has gone up. The GAAP principle says that transportation and set up costs go up because frequency is going up. But the use rate method says that since there is no adding of labor, it is really the same since there should be no volume relation. If losing production of a non-bottleneck, really not losing anything.Different Types of Labor Direct labor is people who change the products condition, status, shape, packaging, appearance or function.Indirect labor are people who logistically support, handle, move, inspect, control, set up, affects the products flow through the manufacturing process without changing the product itself. In use rate calculation, treated as overhead.Burden labor are people who provide supporting supervision, clerical or administrative personnel, labor relations, maintenance, safety without direct product contact. Examples are department managers, supervisors, and engineers. Treated as general overhead in use rate calculation. Manufacturing management labor are people like the vice president of manufacturing, MIS, inventory control, personnel, etc. Treated as overhead in use rate calculation....
