The number of earned hours, or value-added hours, is determined from the computation of product produced and production time required for each product. These total hours are divided into the total cost of labor to determine the cost of labor per standard hour. (Society of Manufacturing Engineers)

You must fully understand what your earned hours are and what portions of labor make up those hours since it is the earned hours that produce your revenues, not the number of hours your employees are at work! (Ezine Articles)

If labor for individual operations are not currently tracked, a chart of accounts must be established that tracks labor down to the operation. Furthermore, by calculating the earned hours (estimated time to complete a task multiplied by the number of items complete), we can measure efficiency. (CBS Interactive Inc. )