Indirect labor refers to the hours that employees spend on projects that cannot be tracked or billed to specific products or production units. It is the wages paid to support workers whose duties do not contribute to the performance of services or manufacture of goods directly, but rather enables others to produce goods. For instance, custodians are employed to keep factory facilities clean, security guards maintain a safe work area, and managers supervise the production workers. Each of these workers is included in indirect labor because they do not produce any products. Other examples of workers employed in indirect labor include maintenance staff, accountants, and managers.
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