capitalizing pension costs

CFA Level II FRA
#1

w.r.t schewesers pg 109,can anyone please explain how pension costs are included in the cost of production of goods ?

#2

Pension costs would compose part of direct labor expenses, which would be capitalized.

#3

Thanks.

So does that imply, that if pension cost is for employees, it is expensed while if its for labour, its capitalised

#4

I think it’s more a matter of direct labor vs. indirect labor; pension costs associated with direct labor would be capitalized, while pension costs associated with indirect labor would be expensed.