Variable Material Overhead Rate

Enter the variable material overhead rate you want to use for applying overhead costs to material costs.

For example, if you apply a 2% rate, the value you must enter in this field is 0.020.

Variable costs fluctuate according to volume changes. Manufacturing supplies and freight charges are examples of variable costs. These costs are applied to material as you issue the materials.

Note:  Material overhead rates are used when applying overhead to material costs, as opposed to labor costs. Fixed and variable labor overhead rates can be entered on the Department form. The system applies material, labor, and machine overhead rates according to the criteria entered in the Overhead Basis field on the Work Center - Scheduling form.