Workforce, Labor Standards & Skills Planning worked example

Labor Standard Calculator at 99% performance efficiency: a worked example

What does the result look like when performance efficiency reaches 99%? The full calculation is worked below with real intermediate numbers. An industrial engineer uses it to set or validate the labor standard that a routing carries for a given lot.

The inputs for this scenario

  • Standard hours per lot: 120 std hrs (unchanged)
  • Fully-loaded labor rate: 38 $/hr (unchanged)
  • Performance efficiency: 99 % (raised for this scenario; the documented default is 95)
  • Fixed setup allowance: 600 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Standard labor cost = standard hours x loaded rate x performance efficiency + setup allowance) to the inputs above produces each figure below.
  • At this operating point the engine returns 5,114 $ for total labor standard cost, the number this scenario is built around.
  • At this operating point the engine returns 42.62 $ / piece for labor standard cost per unit.
  • At this operating point the engine returns 4,514 $ for variable labor standard cost.
  • At this operating point the engine returns 600 $ for fixed labor standard adder.

How this compares with the baseline

  • Against the tool's baseline example, where performance efficiency sits at 95% and the headline result is 4,932 $, this scenario comes in 3.7% above the baseline at 5,114 $.
  • A figure at this level is achievable when performance efficiency is genuinely sustained, not just peaked for a shift. An efficiency above 100% lowers the modeled cost, so a stale or padded standard can make a losing job look profitable; keep time studies current.

Results at a glance

  • Total labor standard cost: 5,114 $ (headline result)
  • Labor standard cost per unit: 42.62 $ / piece
  • Variable labor standard cost: 4,514 $
  • Fixed labor standard adder: 600 $

Run it with your numbers

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

Last reviewed 2026-05-12.