Costing worked example

Labor Cost with operators of 7.5 people: a worked example in costing

Push operators up to 7.5 people and the picture changes. This example computes every intermediate figure at that operating point. Use when labor content drives the quote or improvement case.

The inputs for this scenario

  • Operators: 7.5 people (raised for this scenario; the documented default is 3)
  • Loaded labor rate: 36 $ / hr (unchanged)
  • Cycle time: 52 sec / unit (unchanged)
  • Shift length: 8 hr (unchanged)
  • Actual output: 520 units / shift (unchanged)

Working through the calculation

  • Applying the documented formula (Labor cost per hour = operators × labor rate) to the inputs above produces each figure below.
  • At this operating point the engine returns 3.9 $ / unit for labor cost, the number this scenario is built around.
  • At this operating point the engine returns 4.15 $ / unit for actual labor cost.
  • At this operating point the engine returns 270 $ / hr for labor cost per hour.
  • At this operating point the engine returns 2,160 $ for shift labor cost.

How this compares with the baseline

  • Against the tool's baseline example, where operators sits at 3 people and the headline result is 1.56 $ / unit, this scenario comes in 150% above the baseline at 3.9 $ / unit.
  • It computes labor cost per unit two ways: a standard cost from cycle time and a fully loaded hourly rate, and an actual cost from total shift labor divided by real output. The value of this scenario is the size of the gap it exposes: that gap, priced out over a year, is the budget you can justify spending to close it.

Results at a glance

  • Labor cost: 3.9 $ / unit (headline result)
  • Actual labor cost: 4.15 $ / unit
  • Labor cost per hour: 270 $ / hr
  • Shift labor cost: 2,160 $

Run it with your numbers

  • Every input above is editable in the live Labor Cost calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.