Is a product designer under direct labour costs?
I will try to answer keeping an ABC view. ABC is based on the concpt of ‘Cause-and-effect’. A product designer works on designing the products. This work can be done on ‘Future Products’ (majorly) as well as enhancement of current products. When the efforts are future products then it does not form part of any costing. These are sustaining costs and are to be recovered from the contributions from ‘Current’ products. Some people have a view that those products that ultimately see the market, their cost of design should be added to the product cost based on some amortization. The efforts on the enhance the ‘Current’ products should be added as ‘Product Sustaining’ charges based on some amortization method. I hope this helps. Do let me know if you need more info.
