Labour cost is calculated especially for production. Every production unit involves (a) labour cost, (b) material cost, and (c) operational costs. If it is difficult to calculate unit cost, then the cost for 100 units or 1000 units is calculated, and then the unit cost is determined.
The calculation of labour cost is a time-consuming process. We need to measure the direct and indirect involvement of labour in the production of units. While a worker may be assigned some machine to work on, what about the supervisor? He just supervises and does not operate any machine directly. Therefore, apportioning their work is a time-consuming process.
Steps to Calculate Labour Cost
To address your query, you may perform the following calculation:
(total employee cost in FY / total number of tons of steel produced in FY) = labour cost per ton for that FY
Thanks,
Dinesh Divekar