Enter total manufacturing costs, direct materials (raw materials used), and direct labor costs. The calculator will evaluate and display the manufacturing overhead.

Manufacturing Overhead Calculator

Basic Overhead Rate Apply Overhead Overhead Breakdown

Enter any 3 values to calculate the missing variable

Manufacturing Overhead Formula

The following equation can be used to find manufacturing overhead when you know total manufacturing costs, direct materials (raw materials used), and direct labor. 

MOH = TMC – DM – DL
  • Where MOH is the manufacturing overhead
  • TMC is total manufacturing costs (direct materials + direct labor + manufacturing overhead)
  • DM is the direct materials cost (raw materials used)
  • DL is the direct labor cost

To calculate manufacturing overhead using this relationship, subtract direct materials and direct labor from total manufacturing costs.

Manufacturing Overhead Definition

Manufacturing overhead (also called factory overhead) is the total of indirect manufacturing costs needed to operate a factory that cannot be traced directly to a specific unit of product. It typically includes indirect labor (e.g., factory supervision), indirect materials and supplies, factory rent and utilities, equipment depreciation, and maintenance. It does not include direct materials, direct labor, or non-manufacturing costs such as selling, general, and administrative expenses.

Manufacturing Overhead Example

How to calculate manufacturing overhead?

  1. First, determine the total manufacturing costs (TMC).

    Determine total manufacturing costs for the period (the sum of direct materials, direct labor, and manufacturing overhead).

  2. Next, determine the direct materials cost (DM).

    Calculate the cost of raw materials used (direct materials).

  3. Next, determine the direct labor costs (DL).

    Calculate the direct labor costs associated with producing the goods.

  4. Finally, calculate the manufacturing overhead (MOH).

    Calculate manufacturing overhead using the equation above: MOH = TMC − DM − DL.

FAQ

What is manufacturing overhead?

Manufacturing overhead is the indirect cost of manufacturing a product that is not included in direct materials or direct labor. Examples include factory supervision, maintenance, utilities, rent, and equipment depreciation.