Enter the total cost of goods sold, cost of raw materials, and direct labor costs. The calculator will evaluate and display the manufacturing overhead.
- Cost of Goods Manufactured Calculator (COGM)
- Efficiency Ratio Calculator
- Marginal Product of Labor Calculator
- Total Manufacturing Cost Calculator
Manufacturing Overhead Formula
The following equation is used to calculate the manufacturing overhead of an item.
MO = COGS – CORM – LC
- Where MO is the manufacturing overhead
- COGS is the cost of goods sold
- CORM is the cost of raw material
- LC is the direct labor cost
Manufacturing Overhead Definition
Manufacturing overhead is term used in business to describe the total revenue a manufactured good earns minus it’s raw material cost and direct labor lost. This does not include indirect labor cost or machinery costs.
Manufacturing Overhead Example
How to calculate manufacturing overhead?
- First, determine the COGS.
Calculate the direct cost of goods sold.
- Next, determine the cost of raw material.
Calculate the cost of raw material.
- Next, determine the direct labor costs.
Calculate the direct labors costs associated with the good.
- Finally, calculate the manufacturing overhead.
Calculate the manufacturing overhead using the equation above.
Manufacturing overhead is considered the extra cost of manufacturing a good that isn’t included in direct labor or material costs. That could mean managerial costs, equipment cost, ect.