Relation of Direct Labor to Product Cost:
How much direct labor is in the product you buy? Sometime not very much. During a visit to the Massachusetts Institute of Technology, Chinese Prime Zhu Rongji claimed that, of the $120 retail cost of a pair of athletic shoes made in china, only $2 goes to the Chinese workers who assemble a $90 pair on Nike sneakers is only $1.20
Source: Robert A. Senser, letter to the editor, Business Week, May 24, 1999, pp. 11-12.
A More Productive Use of Time:
Is it always worth the trouble to fill out labor time ticket ? in a word, no. United Electric Control, Inc., located in Waterton, Massachusetts, makes temperature and pressure sensors and controls. The manufacturing vice president decided he wanted employees to spend their time focusing on making products rather than on filling out labor time tickets. The company converted everyone into salaried workers and stopped producing labor reports.
Source: Richard L. Jenson, James W. Brackner, and Clifford Skousen, Management Accounting in Support of Manufacturing Excellence, 1996, The IMA Foundation for Applied Research, Inc., Montvale New Jersey, p. 12
High Tech in the Fields:
Advanced technology for recording data is even found in strawberry fields where the pay of workers is traditionally based on the amount of berries they pick. The Bob Jones Ranch in Oxnard, California, is using dime-sized metal buttons to record how boxes of fruit each worker picks. The buttons, which are stuffed with microelectronics, are carried by the field workers. The buttons can be read in the field with a wand like probe that immediately downloads data to a laptop computer. The information picked up by the probe includes the name of the worker; the type and quality of the crop; and the time, date, and location of the field being picked. Not only does the system supply the data needed to pay over 700 field workers but it also provides farm managers with information about which fields are most productive. Previously, two people were required every night to process the time tickets for the field workers.
Source: Marke Boslet, “Metal Buttons Carried by Crop Pickers Serve as Mini Databases for Farmers,” The Wall Street Journal, May 31, 1994, p. A11a