Enter the labor cost per hour, the number of hours worked, and the cost of materials into the calculator to determine the total cost of service.
Cost of Service Formula
The following formula is used to calculate the total cost of service.
TC = (LC * HW) + MC
Variables:
- TC is the total cost of service ($)
- LC is the labor cost per hour ($)
- HW is the number of hours worked
- MC is the cost of materials ($)
To calculate the total cost of service, multiply the labor cost per hour by the number of hours worked and then add the cost of materials.
What is Cost of Service?
Cost of service is the total amount charged for the completion of a job or project, which includes the labor costs, materials, and any other expenses. This calculation is crucial for businesses to determine the price of their services, ensuring that all costs are covered and a profit margin is included. It is also used by customers to estimate the expected price for a service.
How to Calculate Cost of Service?
The following steps outline how to calculate the Cost of Service.
- First, determine the labor cost per hour (LC).
- Next, determine the number of hours worked (HW).
- Next, determine the cost of materials (MC).
- Use the formula TC = (LC * HW) + MC to calculate the total cost of service (TC).
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
Labor cost per hour (LC) = $50
Number of hours worked (HW) = 8 hours
Cost of materials (MC) = $200
