Contract Manufacturing, Job Shop Quoting & Make-to-Order calculator
Overhead Allocation Calculator
Use this calculator to apply an overhead rate to quoted machine or labor hours and adjust for allocation scope and utilization policy.
What this calculator does
- Estimate overhead dollars allocated to a quoted job or routing.
- checking whether a quote includes enough burden to recover indirect shop cost
- The result estimates overhead dollars included in the quote.
Formula used
- gross overhead before recovery adjustments = overhead burden rate × quoted hours receiving overhead
- allocated overhead dollars = gross overhead before recovery adjustments × overhead scope charged to the quote × overhead recovery factor
Inputs explained
- overhead burden rate: Use the approved overhead rate per labor hour, machine hour, setup hour, or blended shop hour.
- quoted hours receiving overhead: Use routing hours, setup hours, inspection hours, or machine hours assigned to this job.
- overhead scope charged to the quote: Use 100% for full burden or less for customer-owned material, pass-through work, prototypes, or negotiated exceptions.
- overhead recovery factor: Use realistic recovery after utilization, non-billable time, and shop policy adjustments.
How to use the result
- Use it to protect burden recovery, compare costing methods, and explain quote differences across routings or departments.
- Treat the result as an estimate until the RFQ package, customer drawing revision, material quote, routing, setup standard, shop rate, outside service quote, scrap history, open capacity, due date, and quoted commercial terms are confirmed for the same job, lot size, and customer order.
Common questions
- What is the overhead allocation calculator for? Use this calculator to apply an overhead rate to quoted machine or labor hours and adjust for allocation scope and utilization policy.
- What information should I enter? Enter overhead burden rate, quoted hours receiving overhead, overhead scope charged to the quote, and overhead recovery factor from the same RFQ, customer order, routing, capacity window, or quote scenario.
- What does the result tell me? The result estimates overhead dollars included in the quote.
- When is the result only an estimate? Treat the result as an estimate until the RFQ package, customer drawing revision, material quote, routing, setup standard, shop rate, outside service quote, scrap history, open capacity, due date, and quoted commercial terms are confirmed for the same job, lot size, and customer order.
Last reviewed 2026-05-12.