Workforce, Labor Standards & Skills Planning worked example

Labor Cost Per Good Unit at 68% first-pass yield: a worked example

This worked example runs the labor cost per good unit numbers for a tougher week than the baseline: 68% first-pass yield instead of the typical 94%. Translate direct labor spend into a true cost per saleable good unit by accounting for yield loss and rework labor.

The inputs for this scenario

  • Units Produced: 5,000 units (held at the documented default)
  • Labor Cost Per Unit: 1.85 $/unit (held at the documented default)
  • First-Pass Yield: 68 % (the input this scenario stresses; the baseline uses 94)
  • Rework Labor Cost: 600 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Good-unit labor cost = units produced x labor per unit x first-pass yield% + rework labor.
  • Total labor cost per good unit cost works out to 6,890 $ at these inputs, and this is the headline figure for the scenario.
  • Labor cost per good unit cost per unit works out to 1.38 $ / piece at these inputs.
  • Variable labor cost per good unit cost works out to 6,290 $ at these inputs.
  • Fixed labor cost per good unit adder works out to 600 $ at these inputs.

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 25.87% below the baseline at 6,890 $.
  • Use it when comparing quality-driven labor waste across lines, building a make-vs-buy or quoting model, or justifying a yield-improvement project. A result at this level usually justifies acting on the stressed input before touching anything else, because every other figure in the table is downstream of it.

Results at a glance

  • Total labor cost per good unit cost: 6,890 $ (headline result)
  • Labor cost per good unit cost per unit: 1.38 $ / piece
  • Variable labor cost per good unit cost: 6,290 $
  • Fixed labor cost per good unit adder: 600 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Labor Cost Per Good Unit calculator, set first-pass yield to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.