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    Desiree Luna's Avatar
    Desiree Luna Posts: 1, Reputation: 1
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    #1

    May 3, 2009, 04:24 PM
    Direct-labor based overhead
    I need to compute the overhead rate
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    May 4, 2009, 12:53 AM

    Overhead rate is estimated overhead costs divided by the estimated activity base. In this case your activity base is direct labor, so you divide by estimated direct labor. (Although you have not said if it's direct labor hours or direct labor dollars. But just whatever the problem told you.)

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