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Labour cost per unit

Here's how labour cost per unit is calculated:

  • Step 1: Calculate total labour costs: Add up all costs associated with labor, including salaries, wages, overtime pay, benefits, and payroll taxes.
  • Step 2: Calculate the number of units produced: This is the number of products or services that the company produced during the time period being analyzed.
  • Step 3: Calculate labour cost per unit: Divide the total labour costs by the number of units produced to get the labor cost per unit. For example, if a company produced 1,000 units and incurred labour costs of $100,000, the labour cost per unit would be $100 ($100,000 / 1,000 units).

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