Explaining Value Added -- Dickeson

Add in Salaries

Those "processing" costs include salaries and wages of the CEO, accounting people, secretaries, estimators, customer service, warehousing, janitorial, sales, supervisors and factory crews. Plus, the "social costs" of those people must be added to their wages and salaries—taxes, insurance, medical, 401(k)s, and the like. That's the bulk of the processing costs. Then we add interest, realty, services, depreciation and taxes. All of these are "processing" costs that can't be added to specific jobs save by assumptions that attribute them all to manufacturing crew labor called job "chargeable" hours.