.mb-calc-container {
background: #f9f9f9;
border: 1px solid #e0e0e0;
border-radius: 8px;
padding: 25px;
box-shadow: 0 4px 6px rgba(0,0,0,0.05);
margin-bottom: 40px;
}
.mb-calc-title {
text-align: center;
color: #2c3e50;
margin-bottom: 25px;
font-size: 24px;
font-weight: 700;
}
.mb-calc-grid {
display: grid;
grid-template-columns: 1fr 1fr;
gap: 20px;
}
@media (max-width: 600px) {
.mb-calc-grid {
grid-template-columns: 1fr;
}
}
.mb-input-group {
margin-bottom: 15px;
}
.mb-input-group label {
display: block;
margin-bottom: 5px;
font-weight: 600;
font-size: 14px;
color: #555;
}
.mb-input-group input {
width: 100%;
padding: 10px;
border: 1px solid #ddd;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box;
}
.mb-input-group input:focus {
border-color: #3498db;
outline: none;
box-shadow: 0 0 0 2px rgba(52, 152, 219, 0.2);
}
.mb-section-header {
grid-column: 1 / -1;
font-weight: 700;
color: #34495e;
border-bottom: 2px solid #eee;
padding-bottom: 5px;
margin-top: 10px;
margin-bottom: 15px;
}
.mb-btn {
grid-column: 1 / -1;
background-color: #2980b9;
color: white;
border: none;
padding: 15px;
font-size: 18px;
font-weight: bold;
border-radius: 4px;
cursor: pointer;
width: 100%;
transition: background-color 0.2s;
margin-top: 10px;
}
.mb-btn:hover {
background-color: #21618c;
}
.mb-results {
grid-column: 1 / -1;
background: #ffffff;
border: 1px solid #dcdcdc;
padding: 20px;
border-radius: 6px;
margin-top: 20px;
display: none;
}
.mb-result-row {
display: flex;
justify-content: space-between;
margin-bottom: 10px;
padding-bottom: 10px;
border-bottom: 1px solid #eee;
}
.mb-result-row:last-child {
border-bottom: none;
margin-bottom: 0;
padding-bottom: 0;
}
.mb-result-label {
color: #7f8c8d;
font-size: 15px;
}
.mb-result-value {
font-weight: bold;
color: #2c3e50;
font-size: 16px;
}
.mb-final-result {
background-color: #e8f6f3;
border: 1px solid #a3e4d7;
padding: 15px;
border-radius: 4px;
text-align: center;
margin-top: 15px;
}
.mb-final-label {
font-size: 14px;
color: #16a085;
text-transform: uppercase;
letter-spacing: 1px;
font-weight: bold;
}
.mb-final-value {
font-size: 32px;
color: #0e6655;
font-weight: 800;
margin-top: 5px;
}
function calculateBurdenRate() {
// Get inputs
var cost = parseFloat(document.getElementById('machineCost').value);
var salvage = parseFloat(document.getElementById('salvageValue').value);
var life = parseFloat(document.getElementById('usefulLife').value);
var hours = parseFloat(document.getElementById('annualHours').value);
var maint = parseFloat(document.getElementById('annualMaintenance').value);
var power = parseFloat(document.getElementById('annualPower').value);
var space = parseFloat(document.getElementById('annualSpace').value);
var indirect = parseFloat(document.getElementById('annualIndirect').value);
// Validation
if (isNaN(cost) || isNaN(salvage) || isNaN(life) || isNaN(hours) ||
isNaN(maint) || isNaN(power) || isNaN(space) || isNaN(indirect)) {
alert("Please fill in all fields with valid numbers.");
return;
}
if (life <= 0 || hours <= 0) {
alert("Useful Life and Annual Operating Hours must be greater than zero.");
return;
}
// Calculations
// 1. Annual Depreciation (Straight Line)
var annualDepreciation = (cost – salvage) / life;
// 2. Total Variable/Operating Costs (excluding depreciation)
var annualOperating = maint + power + space + indirect;
// 3. Total Annual Burden Cost
var totalAnnualCost = annualDepreciation + annualOperating;
// 4. Hourly Burden Rate
var hourlyRate = totalAnnualCost / hours;
// Display Results
document.getElementById('resDepreciation').innerText = "$" + annualDepreciation.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resOperating').innerText = "$" + annualOperating.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTotalAnnual').innerText = "$" + totalAnnualCost.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resHourlyRate').innerText = "$" + hourlyRate.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show result box
document.getElementById('results').style.display = "block";
}
What is a Machine Burden Rate?
In manufacturing and cost accounting, the Machine Burden Rate (also known as the Machine Hour Rate or Factory Overhead Rate) is the calculated cost of running a specific machine for one hour. It is a critical metric for determining the true cost of production, separate from direct labor and direct materials.
This rate helps manufacturers allocate overhead costs directly to the specific equipment that generates them. Without an accurate burden rate, a company might underprice their products by failing to account for the expensive machinery used to produce them, or overprice products made on cheaper equipment.
Why Calculate Machine Burden Rate?
- Accurate Job Costing: Ensures that high-tech, expensive machines absorb more overhead than simple, low-cost tools.
- Pricing Strategy: Provides a baseline for quoting jobs to ensure profitability.
- ROI Analysis: Helps determine if a machine is generating enough value to cover its operating and capital costs.
- Capacity Planning: Identifies the cost impact of adding shifts or overtime on specific machines.
How to Calculate Machine Burden Rate
The calculation involves summing up all annual costs associated with the machine—both fixed (capital) and variable (operating)—and dividing that by the total hours the machine runs per year.
Formula:
Machine Burden Rate = (Annual Depreciation + Annual Operating Costs) / Annual Operating Hours
1. Calculate Annual Depreciation
Depreciation accounts for the wear and tear of the machine over time. We generally use the straight-line method:
(Purchase Price - Salvage Value) / Useful Life in Years
2. Sum Annual Operating Costs
These are the ongoing costs required to keep the machine running. Common factors include:
- Maintenance & Repair: Service contracts, spare parts, and mechanic labor.
- Power & Utilities: Electricity, compressed air, water, or coolants specifically used by the machine.
- Floor Space: A portion of the factory rent or building depreciation allocated based on the square footage the machine occupies.
- Consumables: Tooling, lubricants, and filters.
3. Determine Annual Operating Hours
This is the divisor in the equation. It represents the realistic number of hours the machine is actually making parts. This should account for shifts per day, days per week, and an efficiency factor (subtracting time for setup, maintenance, and idle time).
Example: 1 shift (8 hours) x 5 days x 50 weeks = 2,000 potential hours. If efficiency is 85%, calculate using 1,700 hours.
Example Calculation
Let's say a CNC Lathe costs $100,000. It will be sold for $20,000 after 10 years. It runs for 2,000 hours a year.
- Depreciation: ($100,000 – $20,000) / 10 = $8,000 / year.
- Operating Costs:
- Power: $4,000
- Maintenance: $2,000
- Space Allocation: $1,000
- Total Operating: $7,000 / year.
- Total Annual Cost: $8,000 (Fixed) + $7,000 (Variable) = $15,000.
- Burden Rate: $15,000 / 2,000 Hours = $7.50 per hour.
This means for every hour the lathe runs, you must charge at least $7.50 just to cover the machine's existence and operation, before adding labor or material costs.