ERP Term
"Work Order Cost "

Work order cost is the value of material, labor, outsourcing, and burden that went into the production of the work order. This includes all direct and indirect costs associated with producing the work order. Indirect costs may include overhead expenses such as utilities, rent, and insurance. The total cost of a work order can be divided into three categories:  

• Direct costs,
• Indirect costs, and
• Overhead costs.

Direct costs are those costs that can be directly attributed to the production of the work order. These costs include materials, labor, and any outsourced services.  

Indirect costs are not directly attributable to the production of the work order but are necessary for the overall operation of the business. These costs include overhead expenses such as utilities, rent, and insurance.  

Overhead costs are not directly related to the production of the work order but are necessary for the overall operation of the business. These costs include administrative expenses such as marketing, accounting, and human resources.