Overhead Rate Calculator
The Overhead Rate Calculator is a tool used to calculate the overhead rate for a business. The formula for calculating the overhead rate is:
Overhead Rate = (Total Overhead Costs / Total Direct Costs) * 100
To calculate the overhead rate, you need to know the total overhead costs and the total direct costs. The total overhead costs include expenses such as rent, utilities, salaries, and administrative expenses, while the total direct costs include the cost of materials, labor, and other direct production costs.
For example, let’s say a company has total overhead costs of $50,000 and total direct costs of $200,000. Using the formula, the overhead rate would be:
Overhead Rate = (50,000 / 200,000) * 100 = 25%