Unit 4: Decision Making to Improve HRM Performance

Flashcards covering the definition, formula, and application of 'Labour cost per unit' based on the lecture notes.

What is 'labour cost per unit'?

Labour cost per unit is a measure of the average labour costs involved in producing one unit of output in a given time period.

What is the formula for calculating 'labour cost per unit'?

Labour cost per unit = total labour costs / total unit of outputs

In the worked example, what were the total labour costs for the month?

40 employees * £1,000/employee = £40,000

Using the worked example, what was the labour cost per unit?

£40,000 (total labour costs) ÷ 18,000 (output units) = £2.20 per unit

If 10 people are employed, each paid £300, and output is 25,000 units, what are the total labour costs?

10 employees * £300/employee = £3,000

If total labour costs are £3,000 and output is 25,000 units, what is the labour cost per unit?

£3,000 (total labour costs) ÷ 25,000 (output units) = £0.12 per unit