Labour Costs
Expenses related to employees: wages, salaries, benefits, training, recruitment, compliance.
Formula
Labour Cost per Unit = Total Labour Cost ÷ Units Produced
Real World
Amazon has invested billions in warehouse robotics specifically to reduce its labour costs per unit dispatched, helping it undercut traditional retailers on price.
Exam Focus
Quantify where possible — state labour cost as a percentage of total costs to show analytical depth; avoid vague phrases like 'quite high'.
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