How to include labour costs in a Production Order?

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It is common business practise to include the time it takes to fulfil a production order in the item cost of the end product.
In a production order, this can be achieved with the inclusion of a labour-type, non-stock item:



The issue method is set automatically to 'Backflush'. The item should be defined to have a standard cost:



When including this item in a 'Bill of Materials' (BOM), its sales price according to the price list chosen is included in the price of the end product:
2*0.8 = 1.6
2*1.2 = 2.4
0.2*50 = 10
1*10 = 10
3*1.5 = 4.5
->  1.6+2.4+10+10+4.5 = 28.50
  

The journal entry created upon fulfilling a production order of that BOM includes the labour costs:




Raw Materials (Other Components) - GBP 2.45
+ Labour Component - GBP 3.00 ( that is 0.2*15 (standard price of labour item) = 3)
Total cost posted to the end product - GBP 5.45
A sales document will also include the labour costs in its gross profit calculations according to the base price list setting: