During the 1970s, Generac expanded its offerings in the portable and recreational vehicle markets, and in the 1980s the company entered the commercial and industrial markets with its backup power generation systems.
Add each cost to determine the labor burden cost of the employee. In this example, assume you pay $2,000 in payroll taxes, $1,000 in insurance, $2,000 in benefits and $5,000 in supplies and other miscellaneous expenses. Add together $2,000, $1,000, $2,000 and $5,000 to get a labor burden cost of $10,000.
These estimates are based on the previous yearâs overhead costs and direct labor hours and are adjusted for expected increases in demand the coming year. The predetermined overhead rate is $32 per direct labor hour (= $8,000,000 Ã· 250,000 direct labor hours).Thus, as shown in Figure 3.1 Using One Plantwide Rate to Allocate SailRite Companyâs Overhead , products are charged $32 in overhead costs for each direct labor hour worked.hese estimates are based on the previous yearâs overhead costs and direct labor hours and are adjusted for expected increases in demand the coming year. The predetermined overhead rate is $32 per direct labor hour (= $8,000,000 Ã· 250,000 direct labor hours).