.sf-calculator-container {
max-width: 650px;
margin: 2rem auto;
padding: 2rem;
background-color: #f8f9fa;
border: 1px solid #e9ecef;
border-radius: 8px;
font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif;
box-shadow: 0 4px 6px rgba(0,0,0,0.05);
}
.sf-calculator-container h2 {
text-align: center;
color: #2c3e50;
margin-bottom: 1.5rem;
font-size: 1.5rem;
}
.sf-form-group {
margin-bottom: 1.25rem;
}
.sf-form-group label {
display: block;
margin-bottom: 0.5rem;
color: #495057;
font-weight: 600;
}
.sf-input-wrapper {
position: relative;
display: flex;
align-items: center;
}
.sf-input-wrapper input, .sf-input-wrapper select {
width: 100%;
padding: 0.75rem;
border: 1px solid #ced4da;
border-radius: 4px;
font-size: 1rem;
transition: border-color 0.15s ease-in-out;
}
.sf-input-wrapper input:focus, .sf-input-wrapper select:focus {
border-color: #4da3ff;
outline: 0;
box-shadow: 0 0 0 0.2rem rgba(0, 123, 255, 0.25);
}
.sf-currency-symbol {
position: absolute;
left: 10px;
color: #6c757d;
}
.sf-input-indent {
padding-left: 1.5rem !important;
}
.sf-btn {
display: block;
width: 100%;
padding: 0.85rem;
background-color: #2c3e50;
color: white;
border: none;
border-radius: 4px;
font-size: 1.1rem;
font-weight: 600;
cursor: pointer;
transition: background-color 0.2s;
}
.sf-btn:hover {
background-color: #1a252f;
}
.sf-result-box {
margin-top: 1.5rem;
padding: 1.5rem;
background-color: #ffffff;
border-left: 5px solid #28a745;
border-radius: 4px;
display: none;
}
.sf-result-label {
font-size: 0.9rem;
color: #6c757d;
text-transform: uppercase;
letter-spacing: 1px;
}
.sf-result-value {
font-size: 2rem;
font-weight: 700;
color: #28a745;
margin: 0.5rem 0;
}
.sf-result-detail {
font-size: 0.95rem;
color: #495057;
line-height: 1.5;
}
.sf-error {
color: #dc3545;
font-size: 0.9rem;
margin-top: 0.5rem;
display: none;
}
/* Article Styling */
.sf-article-content {
max-width: 800px;
margin: 3rem auto;
font-family: 'Georgia', serif;
line-height: 1.6;
color: #333;
}
.sf-article-content h1 {
font-family: 'Segoe UI', sans-serif;
color: #2c3e50;
font-size: 2.5rem;
margin-bottom: 1rem;
}
.sf-article-content h2 {
font-family: 'Segoe UI', sans-serif;
color: #2c3e50;
margin-top: 2rem;
}
.sf-article-content h3 {
font-family: 'Segoe UI', sans-serif;
color: #34495e;
margin-top: 1.5rem;
}
.sf-article-content p {
margin-bottom: 1rem;
font-size: 1.1rem;
}
.sf-article-content ul {
margin-bottom: 1rem;
padding-left: 2rem;
}
.sf-article-content li {
margin-bottom: 0.5rem;
font-size: 1.05rem;
}
.sf-highlight {
background-color: #fff3cd;
padding: 0.2rem 0.4rem;
border-radius: 2px;
}
.sf-formula-box {
background-color: #e9ecef;
padding: 1.5rem;
text-align: center;
font-family: 'Courier New', monospace;
font-weight: bold;
margin: 2rem 0;
border-radius: 4px;
}
function calculateStandardRate() {
// Get Input Values
var overheadCost = document.getElementById('budgetedFixedOverhead').value;
var allocationBase = document.getElementById('budgetedAllocationBase').value;
var baseType = document.getElementById('allocationBaseUnit').value;
var errorDiv = document.getElementById('errorMsg');
var resultBox = document.getElementById('resultBox');
// Reset state
errorDiv.style.display = 'none';
resultBox.style.display = 'none';
// Validation
if (overheadCost === "" || allocationBase === "" || isNaN(overheadCost) || isNaN(allocationBase)) {
errorDiv.innerText = "Please fill in all fields with valid numbers.";
errorDiv.style.display = 'block';
return;
}
var costNum = parseFloat(overheadCost);
var baseNum = parseFloat(allocationBase);
if (costNum < 0 || baseNum <= 0) {
errorDiv.innerText = "Costs must be positive and allocation base must be greater than zero.";
errorDiv.style.display = 'block';
return;
}
// Calculation
var rate = costNum / baseNum;
// Formatting Output
var formattedRate = rate.toFixed(2);
var unitLabel = "";
if (baseType === "Direct Labor Cost") {
// Usually expressed as a percentage for cost bases
var percentageRate = (rate * 100).toFixed(2);
document.getElementById('rateResult').innerText = percentageRate + "%";
document.getElementById('rateDetail').innerText = "Of Direct Labor Cost";
} else {
// Per unit/hour bases
document.getElementById('rateResult').innerText = "$" + formattedRate;
// Singularize the unit for display (removing 's' if present, rough check)
var singularBase = baseType;
if (baseType.endsWith("s")) {
singularBase = baseType.slice(0, -1);
}
document.getElementById('rateDetail').innerText = "Per " + singularBase;
}
// Show Results
resultBox.style.display = 'block';
}
How to Calculate Standard Fixed Overhead Rate
In managerial accounting and cost accounting, accurately allocating indirect costs is essential for determining the true cost of a product. The Standard Fixed Overhead Rate is a predetermined rate used to assign fixed manufacturing overhead costs to products based on a specific allocation base. Unlike variable costs, fixed costs do not fluctuate with production volume in the short term, making their allocation slightly more complex.
What is the Standard Fixed Overhead Rate?
The standard fixed overhead rate represents the amount of fixed manufacturing overhead allocated to each unit of activity (such as a machine hour or a direct labor hour). It is calculated at the beginning of a fiscal period based on budgeted data.
This rate is a cornerstone of Standard Costing systems. It allows companies to estimate the cost of goods sold (COGS) and inventory values before the actual costs are fully realized at the end of the year.
Standard Fixed Overhead Rate =
Total Budgeted Fixed Overhead Costs / Budgeted Allocation Base
Component Definitions
- Total Budgeted Fixed Overhead Costs: These are manufacturing costs that remain constant regardless of production volume. Examples include factory rent, depreciation on machinery, insurance on the plant, and salaries of production supervisors.
- Budgeted Allocation Base: This is the measure of activity used to assign the overhead. Common bases include:
- Direct Labor Hours (DLH): Used in labor-intensive industries.
- Machine Hours (MH): Used in capital-intensive, automated industries.
- Units of Production: Used when a company produces a single, uniform product.
Step-by-Step Calculation Guide
Step 1: Estimate Fixed Overhead
Review historical financial data and future contracts to estimate the total fixed overhead for the upcoming year. For example, if your annual factory rent is $120,000 and supervisor salaries are $80,000, your total budgeted fixed overhead is $200,000.
Step 2: Determine the Allocation Base
Decide which metric drives your production costs or is most representative of capacity. If machines do most of the work, choose Machine Hours.
Step 3: Estimate Capacity (Denominator Activity)
Estimate the total volume of the allocation base for the period. This is often referred to as "Normal Capacity" or "Budgeted Capacity." For instance, you might estimate that your machines will run for 10,000 hours this year.
Step 4: Divide
Using the example figures:
$200,000 (Cost) ÷ 10,000 (Hours) = $20.00 per Machine Hour.
This means for every hour a machine runs to produce a product, $20 of fixed overhead is added to that product's standard cost.
Why is this Important?
Calculating this rate allows businesses to:
- Set Prices Accurately: Ensuring all fixed costs are covered in the product price.
- Analyze Variance: By comparing the Applied Fixed Overhead (Standard Rate × Actual Activity) against the Actual Fixed Overhead incurred, accountants can calculate volume variances and budget variances to assess efficiency.
- Value Inventory: GAAP and IFRS require overhead to be included in inventory valuation.
Example Scenario
Imagine a furniture manufacturer, OakCraft Ltd. They budget $500,000 for factory rent and utilities (fixed costs). They plan to use Direct Labor Hours as their base because their work is handcrafted. They budget for 25,000 labor hours for the year.
Calculation: $500,000 / 25,000 DLH = $20.00 per Direct Labor Hour.
If a specific dining table takes 5 hours to build, the fixed overhead assigned to that table is $20.00 × 5 = $100.00.
Using the Calculator
Use the tool above to quickly determine your rate. Simply input your total expected fixed costs for the period and your expected volume of activity (hours, units, or dollars). Ensure you select the correct unit type to understand the resulting metric.