What is a Labor Time Record?

Definition: A labor-time record is the source document used by managers to keep track of direct manufacturing labor. In other words, managers write down the amount of time spent per employee on given tasks.

What Does Labor Time Record Mean?

The labor-time record may also include employee information like hourly wages, job descriptions, and employment and promotion dates. This helps management estimate costs and assign the proper workers to products and departments.

In cost accounting, managers keep track of production schedules, budgets, costs, and labor hours. Managers use different reports to help keep track of costs and labor hours. One of these reports is a labor-time record.


It might be easier to take a look at an example. Let’s take the Ibanez guitar factory for example. Joe is guitar building at the Ibanez guitar factory. He mainly works on cutting out guitar bodies (job 1) and guitar necks (job 2). He also has to repair and fix his machines when they break down. Joe’s labor-time record shows all the hours he spends working on job 1 and job 2.

It also shows the amount of time Joe has to spend fixing his machine. This time is not a direct manufacturing labor cost because it can’t be directly attributed to his jobs. Instead, a manager takes this time, multiplies it by his hourly rate, and adds it to the estimate of overhead expenses.

Using the labor-time record system, a manager can accurately keep track of labor expenses and production expenses. This system is also useful for budgeting.