Note:

The Cost Per Minute (CPM) formula calculates the cost efficiency of operations based on labor and operational costs divided by available work minutes.

• Direct Labor Cost: The total wages paid to workers for a given period.
• Operational Cost: Expenses required to keep operations running, such as rent, utilities, and materials.
• Available Minutes: The total number of working minutes available in a given period.

Real-Life Application: CPM helps companies measure the efficiency of production lines, call centers, and service-based industries where time-based costing is crucial.

Conclusion: A lower CPM indicates better efficiency, meaning costs are optimized relative to time usage.