Work out labour cost per unit instantly with clear inputs, formula shown and shareable results.
Direct labour cost per unit is loaded hours divided by units. Isolating the idle-time share shows how much of the unit cost is paid for time that produced nothing — usually the fastest cost reduction available on a labour-intensive line.
Labour cost per unit
Cost per unit = (Direct hours x Loaded rate) / Units produced
Idle cost
Idle cost = Total labour cost x Idle time %
Base pay plus employer taxes, pension, holiday, insurance and shift premia — typically 25-60% above base pay depending on jurisdiction.
Because it is recoverable capacity. Reducing idle time cuts unit cost without touching wage rates or headcount.