How to work out labour cost per unit
Divide the labour cost by the units made. See why the answer falls with output on time rate and stays the same on piecework.
Task 1Labour cost divided by output3 questions
Labour cost per unit is the labour cost of a period, divided by the good units made in that period.
Assembly has 8 workers. Each works 38 hours a week at £15 an hour. In week 1 they assemble 32 tables.
Labour hours per unit is found in the same way: the hours worked, divided by the units made.
Task 2Time rate: more output, lower cost per unit2 questions
Task 3Piecework: the same cost for every unit3 questions