labor that is employed to produce commodities at the social average of costs, quality, the utility of the final product, etc. is what gives commodities their value?

That commodities/services are a consequence of labor applied to capital over time.

And the labor value actualized/squandered is equal to the utility of the commodities/services they produced as a percentage of the maximal utility value they could have produced.

Labor value exists as a function of potential man hours * time * most-efficient-product/service rendered. And that labor value can be realized or lost, depending on whether the laborer is employed efficiently. Thus, the goal of a well-run economy is to maximize the utility output of individuals in order to achieve a long-term improvement in quality of life for the polity.

Hence "from each according to their skill, to each according to their need". Maximize utility of labor inputs. Equitably distribute outputs.