.bmoh-calc-container {
font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif;
max-width: 800px;
margin: 0 auto;
padding: 20px;
background-color: #f9f9f9;
border: 1px solid #e0e0e0;
border-radius: 8px;
}
.bmoh-header {
text-align: center;
margin-bottom: 30px;
}
.bmoh-header h2 {
color: #2c3e50;
margin: 0;
}
.bmoh-grid {
display: grid;
grid-template-columns: 1fr 1fr;
gap: 20px;
margin-bottom: 20px;
}
.bmoh-input-group {
display: flex;
flex-direction: column;
}
.bmoh-input-group label {
font-weight: 600;
margin-bottom: 8px;
color: #34495e;
}
.bmoh-input-group input, .bmoh-input-group select {
padding: 10px;
border: 1px solid #bdc3c7;
border-radius: 4px;
font-size: 16px;
}
.bmoh-input-group input:focus {
outline: none;
border-color: #3498db;
box-shadow: 0 0 5px rgba(52, 152, 219, 0.3);
}
.bmoh-full-width {
grid-column: 1 / -1;
}
.bmoh-btn {
width: 100%;
padding: 12px;
background-color: #2980b9;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
cursor: pointer;
transition: background-color 0.3s;
}
.bmoh-btn:hover {
background-color: #2471a3;
}
.bmoh-result-box {
margin-top: 25px;
padding: 20px;
background-color: #ffffff;
border-left: 5px solid #27ae60;
box-shadow: 0 2px 5px rgba(0,0,0,0.05);
display: none;
}
.bmoh-result-title {
font-size: 14px;
text-transform: uppercase;
color: #7f8c8d;
letter-spacing: 1px;
}
.bmoh-result-value {
font-size: 32px;
font-weight: bold;
color: #2c3e50;
margin: 10px 0;
}
.bmoh-result-desc {
font-size: 15px;
color: #555;
}
.bmoh-article {
margin-top: 40px;
line-height: 1.6;
color: #333;
}
.bmoh-article h2 {
color: #2c3e50;
margin-top: 30px;
border-bottom: 2px solid #ecf0f1;
padding-bottom: 10px;
}
.bmoh-article ul {
background: #fff;
padding: 20px 40px;
border-radius: 5px;
border: 1px solid #eee;
}
.bmoh-article li {
margin-bottom: 10px;
}
@media (max-width: 600px) {
.bmoh-grid {
grid-template-columns: 1fr;
}
}
function calculateOverheadRate() {
// Retrieve Input Values
var overheadCost = parseFloat(document.getElementById('totalOverheadCost').value);
var allocationBase = parseFloat(document.getElementById('totalAllocationBase').value);
var baseType = document.getElementById('baseType').value;
var resultBox = document.getElementById('resultBox');
// Reset Logic
resultBox.style.display = 'none';
// Validation
if (isNaN(overheadCost) || overheadCost <= 0) {
alert("Please enter a valid Total Budgeted Manufacturing Overhead Cost.");
return;
}
if (isNaN(allocationBase) || allocationBase <= 0) {
alert("Please enter a valid Total Budgeted Allocation Base.");
return;
}
// Calculation
var rate = overheadCost / allocationBase;
var formattedRate = "";
var explanation = "";
// Formatting based on Type
if (baseType === "dlh") {
// Direct Labor Hours
formattedRate = "$" + rate.toFixed(2) + " per Direct Labor Hour";
explanation = "For every hour of direct labor worked, allocate $" + rate.toFixed(2) + " to overhead costs.";
} else if (baseType === "mh") {
// Machine Hours
formattedRate = "$" + rate.toFixed(2) + " per Machine Hour";
explanation = "For every machine hour utilized, allocate $" + rate.toFixed(2) + " to overhead costs.";
} else if (baseType === "dlc") {
// Direct Labor Cost (Output as Percentage)
var percentage = rate * 100;
formattedRate = percentage.toFixed(2) + "% of Direct Labor Cost";
explanation = "Overhead is applied at " + percentage.toFixed(2) + "% of the direct labor wages paid.";
} else {
// Generic Unit
formattedRate = "$" + rate.toFixed(2) + " per Unit";
explanation = "For every unit of the allocation base, apply $" + rate.toFixed(2) + " to overhead.";
}
// Display Result
document.getElementById('rateResult').innerHTML = formattedRate;
document.getElementById('rateExplanation').innerHTML = explanation;
resultBox.style.display = 'block';
}
function updateLabel() {
var type = document.getElementById('baseType').value;
var label = document.getElementById('baseLabel');
if (type === 'dlh') {
label.innerHTML = 'Total Budgeted Direct Labor Hours (Hours)';
} else if (type === 'mh') {
label.innerHTML = 'Total Budgeted Machine Hours (Hours)';
} else if (type === 'dlc') {
label.innerHTML = 'Total Budgeted Direct Labor Cost ($)';
} else {
label.innerHTML = 'Total Budgeted Base Units';
}
}
How to Calculate Budgeted Manufacturing Overhead Rate
Calculating the Budgeted Manufacturing Overhead Rate (also known as the Predetermined Overhead Rate) is a critical step in managerial accounting and cost control. It allows manufacturers to estimate the cost of production before the actual period begins, ensuring that product pricing covers all indirect manufacturing expenses.
The Formula
The standard formula for calculating the predetermined overhead rate is:
Predetermined Overhead Rate = Total Budgeted Manufacturing Overhead Costs / Total Budgeted Allocation Base
Key Components
- Total Budgeted Manufacturing Overhead Costs: This includes all indirect costs related to production that cannot be traced directly to a specific unit. Examples include factory rent, electricity, depreciation on machinery, supervisor salaries, and indirect materials (glue, nails, etc.).
- Allocation Base: This is the driver used to assign overhead to products. It should be the activity that most closely correlates with the incurrence of overhead costs. Common bases include:
- Direct Labor Hours (DLH): Used when production is labor-intensive.
- Machine Hours (MH): Used when production is highly automated.
- Direct Labor Cost ($): Used when higher-paid employees correlate with higher overhead usage.
Example Calculation
Let's assume a furniture manufacturing company, "WoodWorks Inc.", is preparing its budget for the upcoming year.
Step 1: Estimate Overhead Costs
WoodWorks estimates total factory rent, utilities, and supervisor salaries will amount to $600,000.
Step 2: Estimate Allocation Base
Since their work is manual, they use Direct Labor Hours as the base. They estimate their team will work 40,000 hours next year.
Step 3: Apply the Formula
$$ \text{Rate} = \frac{\$600,000}{40,000 \text{ hours}} = \$15.00 \text{ per Direct Labor Hour} $$
This means for every hour a carpenter works on a chair, the company must add $15.00 to the cost of that chair to cover the factory overhead.
Why Use a Budgeted Rate Instead of Actual?
Actual overhead costs fluctuate seasonally (e.g., heating bills in winter) and are often not fully known until the end of the year. Using a budgeted rate allows companies to:
- Price products immediately: You don't have to wait until year-end to know how much a product costs to make.
- Smooth out fluctuations: It prevents unit costs from appearing artificially high during months with low production volume or high seasonal bills.
- Evaluate Performance: By comparing applied overhead (Rate × Actual Activity) with actual overhead incurred, managers can analyze variances to improve efficiency.