Why is my actual labor cost above standard?

Because the crew was paid for more hours than its good output earned at standard. On the defaults, 24 paid hours earn 22.5 standard hours, so each good unit carries 6.5% more labor. Extra hands, downtime, scrap and slow cycles all land here.

Should I enter the loaded rate or the base wage?

The loaded rate: direct labor cost includes payroll taxes and benefits, not just the wage. A published average wage leaves them out, so add your burden before entering one.

What if more people ran the cell than the routing calls for?

Enter the people actually paid as operators and the routing's crew as standard crew. The extra hands raise actual cost but not standard cost, so they show up as lost efficiency and an unfavorable variance.

How do I count an operator shared between two cells?

Enter the share of their paid time on this cell, such as 0.5 for an even split. Use the same share in standard crew if the routing also shares them.

Costing calculator

Manufacturing Labor Cost Calculator

Find what direct labor cost per good unit on a cell at shift or month end, and how far it ran from the routing standard. You need crew, loaded labor rate, paid hours, good output and the routing.

What this calculator does

Direct labor cost per good unit from crew, rate, paid hours and output, against the routing standard.

Formula used

Shift labor cost = operators × loaded labor rate × paid hours
Labor cost per good unit = shift labor cost ÷ good units
Standard labor cost per unit = standard crew × loaded labor rate × standard cycle ÷ 3,600 sec per hr
Labor efficiency = good units × standard crew × standard cycle ÷ (operators × paid hours × 3,600)
Variance per unit = actual − standard; variance per shift = variance per unit × good units

Inputs explained

Operators: People paid on the cell; a shared operator counts as 0.5.
Loaded Labor Rate: Wage plus payroll taxes and benefits per paid hour.
Paid Hours per Shift: Paid hours per operator, including paid breaks.
Good Units per Shift: Units that passed inspection, from the shift report.
Standard Cycle Time: Routing standard seconds per unit for the cell, with allowances.
Standard Crew: Operators the routing staffs the cell with at that cycle.

How to use the result

Best suited to month-end labor variance review, costing a cell's labor before a quote, checking a rebalanced cell against its routing.
Direct labor only: supervision, indirect labor, machine cost and overhead are separate lines. One loaded rate prices actual and standard hours, so the variance is time, not rate.

Current U.S. benchmarks

As of Sep 2026, average hourly earnings in U.S. manufacturing are $30.21 (BLS), up 3.4% from a year earlier. Burdened shop rates typically run 1.3 to 1.8 times earnings once benefits and overhead are loaded.
U.S. manufacturing runs at 75.7% of capacity (Federal Reserve, Aug 2026). New factory orders are up 8.5% year over year (Census).

Common questions

Why is my actual labor cost above standard? Because the crew was paid for more hours than its good output earned at standard. On the defaults, 24 paid hours earn 22.5 standard hours, so each good unit carries 6.5% more labor. Extra hands, downtime, scrap and slow cycles all land here.
Should I enter the loaded rate or the base wage? The loaded rate: direct labor cost includes payroll taxes and benefits, not just the wage. A published average wage leaves them out, so add your burden before entering one.
What if more people ran the cell than the routing calls for? Enter the people actually paid as operators and the routing's crew as standard crew. The extra hands raise actual cost but not standard cost, so they show up as lost efficiency and an unfavorable variance.
How do I count an operator shared between two cells? Enter the share of their paid time on this cell, such as 0.5 for an even split. Use the same share in standard crew if the routing also shares them.

Related guides

Last reviewed 2026-10-02.