Overhead Rates
Computed direct and indirect overhead rates are based on annual overhead costs and annual earned machine hours:
Direct Overhead Rate = Direct Overhead Cost / Annual Earned Machine Hours
Indirect Overhead Rate = Indirect Overhead Cost / Annual Earned Machine Hours
These values are adjusted by the factor specified by the cost model variable overheadRateAdjustmentFactor.
Annual earned machine hours is the number of expected machine uptime hours annually:
Annual Earned Machine Hours = Work Center Capacity * Machine Uptime Percent
Work Center Capacity = Hours per Shift * Number of Shifts * Working Days per Year
Hours per shift (specified by the VPE variable Hours Per Shift)
Number of shifts (specified by the VPE variable Number Of Shifts)
Working days per year (specified by the VPE variable Working Days Per Year)
Machine Uptime Percent (specified by the machine property Machine Uptime Percent)
Annual overhead cost calculations are described in
Annual Direct Overhead and
Annual Indirect Overhead.