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.

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 ...

and fixed manufacturing overhead. Unlike variable costing, which only considers direct variable costs and not fixed costs, absorption costing ensures that fixed overhead costs are spread across ...