To calculate the rate of overhead, divide the indirect costs by the allocation measure you're using. So, the denominator in your formula may be the total number of direct labor hours involved.

In the box below is an example of how the formula cited above can be applied ... or charge the unallocated cost to overhead. Keeping your rate to 50% to 60% of the rental company rental rate ...

While fixed costs remain constant regardless of production volume (like rent, overhead, or insurance), and average cost is the total cost divided by the number of units produced, marginal cost ...

that range from rent to administrative costs to marketing costs Overhead refers to all non-labor expenses required to operate your business. These expenses are either fixed or variable ...