The setup & run time on the production order operation are used to calculate the time.

Depending on how you have your Production Preference set to use Standard or Employee labor rate - controls how the cost is calculated.

@steph23 - one other thing that sometimes people don’t know - yes - you can see planned cost overall for the Production order on the totals tab, but did you know you can also see planned cost by operation too? If you look at the operation (Production Details) there is also a Totals tab too. This helps when verifying costs and also when trouble shooting variances. 

Also, make sure that the shift Differential Type, if set to rate, is at least 1.  A client of ours ran into this and although they had a default work center rates, when the cost calculation was done, labor was zero because the Shift Differential was zero.