Laborer's wages are categorized as which type of expense?

Laborer's wages are classified as direct costs because they can be directly attributed to a specific construction project. In the context of project costing, direct costs are those expenses that are directly tied to the production of goods or services, which in this case are the laborers who perform the hands-on work required to complete the project. Their wages are incurred specifically for the tasks they are assigned, making it easy to allocate and track these costs against the overall budget for a given project.

This distinction is important for construction management and project accounting, as it enables contractors to understand the actual costs associated with labor in real-time, allowing for more accurate budgeting and financial planning. By monitoring direct costs, contractors can assess the efficiency and profitability of their projects effectively.