Workforce, Labor Standards & Skills Planning worked example

Labor Cost Per Good Unit at 99% first-pass yield: a worked example

What does the result look like when first-pass yield reaches 99%? The full calculation is worked below with real intermediate numbers. A cost accountant determining how scrap and rework inflate the real labor cost embedded in each shippable part.

The inputs for this scenario

  • Units Produced: 5,000 units (unchanged)
  • Labor Cost Per Unit: 1.85 $/unit (unchanged)
  • First-Pass Yield: 99 % (raised for this scenario; the documented default is 94)
  • Rework Labor Cost: 600 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Good-unit labor cost = units produced x labor per unit x first-pass yield% + rework labor) to the inputs above produces each figure below.
  • At this operating point the engine returns 9,758 $ for total labor cost per good unit cost, the number this scenario is built around.
  • At this operating point the engine returns 1.95 $ / piece for labor cost per good unit cost per unit.
  • At this operating point the engine returns 9,158 $ for variable labor cost per good unit cost.
  • At this operating point the engine returns 600 $ for fixed labor cost per good unit adder.

How this compares with the baseline

  • Against the tool's baseline example, where first-pass yield sits at 94% and the headline result is 9,295 $, this scenario comes in 4.98% above the baseline at 9,758 $.
  • A figure at this level is achievable when first-pass yield is genuinely sustained, not just peaked for a shift. It treats yield and a single rework figure as the only quality effects; scrapped material cost, warranty returns, and downstream inspection labor sit outside this calculation.

Results at a glance

  • Total labor cost per good unit cost: 9,758 $ (headline result)
  • Labor cost per good unit cost per unit: 1.95 $ / piece
  • Variable labor cost per good unit cost: 9,158 $
  • Fixed labor cost per good unit adder: 600 $

Run it with your numbers

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

Last reviewed 2026-05-12.