# Epicor Resource Group Burden Rate Calculator

> Source: https://netray.co/tools/epicor-resource-group-burden-rate-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Convert monthly overhead and productive hours into a burden rate per hour, add labor, and see the cost per piece for a routing operation.

## Category

epicor

## Erp

Epicor Kinetic

## Industry

Discrete Manufacturing

## Audience

- Cost accountant
- Controller
- Epicor administrator

## Tool

**Kind:** calculator

**Inputs:**

#### Monthly overhead for the cost center

**Key:** overhead

**Type:** number

**Default:** 38000

**Min:** 0

**Step:** 500

**Unit:** $

**Help:** Depreciation, power, maintenance, tooling, supervision and floor space allocated to the resource group.

#### Available hours per month

**Key:** avail_hours

**Type:** number

**Default:** 480

**Min:** 1

**Step:** 10

**Unit:** hours

**Help:** Machines multiplied by scheduled hours per month.

#### Planned utilization

**Key:** util

**Type:** slider

**Default:** 75

**Min:** 20

**Max:** 100

**Step:** 1

**Unit:** %

#### Direct labor rate per hour

**Key:** labor_rate

**Type:** number

**Default:** 28

**Min:** 0

**Step:** 0.5

**Unit:** $

#### Operators per machine

**Key:** crew

**Type:** number

**Default:** 1

**Min:** 0.1

**Step:** 0.1

**Unit:** people

#### Run time per piece

**Key:** run_min

**Type:** number

**Default:** 6

**Min:** 0

**Step:** 0.5

**Unit:** min

**Outputs:**

#### Productive hours

**Key:** prod_hours

**Expr:** avail_hours * util / 100

**Format:** number

#### Burden rate per productive hour

**Key:** burden

**Expr:** overhead / prod_hours

**Format:** currency

**Primary:** true

**Description:** Candidate production burden rate for the resource group.

#### Labor cost per machine hour

**Key:** labor

**Expr:** labor_rate * crew

**Format:** currency

#### Total cost rate per hour

**Key:** total_rate

**Expr:** burden + labor

**Format:** currency

**Primary:** true

#### Conversion cost per piece

**Key:** per_piece

**Expr:** total_rate * run_min / 60

**Format:** currency

**Chart:**

#### Cost rate vs planned utilization

**Type:** line

**X:** util

**From:** 30

**To:** 95

**Steps:** 27

**Series:**

- burden
- total_rate

**Currency:** $

**Disclaimer:** Illustrative absorption costing. Your accounting policy and Epicor costing method determine what is actually posted.

## Content

**Intro:** Every routing operation in Epicor costs out through the rates on its resource group, so a wrong burden rate quietly distorts quotes, job costs and inventory value. This calculator derives a rate from overhead and realistic productive hours and shows what happens to it as utilization moves.

**Sections:**

#### How to use it

**Body:** Start with the monthly overhead you want the resource group to absorb. Divide the machine or work center into available hours, then apply the utilization you honestly expect, not the nameplate capacity. The tool returns the burden rate per productive hour, adds labor with crew size, and gives a conversion cost per piece for a given run time. You then compare the burden figure with the production burden rate currently set on the resource group in Epicor.

**Bullets:**

- Use planned, not theoretical, utilization
- Keep setup and production burden rates conceptually separate
- Document the overhead pool so the rate can be reproduced

#### The method

**Body:** This is a predetermined overhead rate: budgeted overhead divided by budgeted activity, here productive machine hours. If actual hours fall short, overhead is under-absorbed and shows up as a variance at period end. If you plan for 75 percent utilization and run at 55, the shortfall flows to the variance accounts rather than to part cost. The chart makes the sensitivity obvious: the rate rises steeply once utilization drops below about 50 percent.

#### Reading the result

**Body:** With the defaults, burden is about 106 dollars per productive hour, which is not unusual for a CNC cell with high depreciation. Add labor and the total rate is about 134 an hour, or roughly 13 dollars of conversion cost for a six minute operation. Compare against what your quotes assume. Where the quote assumes less, you are giving away margin on every job through that work center.

#### Common mistakes

**Body:** The usual errors are including costs twice, once in burden and once in a separate labor overhead, and basing the rate on 100 percent utilization. A rate set too low makes machines look cheap and encourages work that loses money; set too high, it prices you out of quotes. Review the rates at least yearly and after any major capital purchase or headcount change.

**Cta:** If you would like a review of your resource group rates against actual job cost variances in Epicor, we can analyze this read-only with you.

**Faq:**

#### Where are burden rates set in Epicor?

**Answer:** Rates are held on the resource group and resource records, with separate setup and production values for labor and burden. Check your Kinetic version for the exact screen and how it combines with operation and employee rates.

#### What utilization should I plan for?

**Answer:** Use your actual historical productive share of scheduled time, often between 60 and 85 percent for machining work. Planning at 100 percent guarantees under-absorption and misleading part costs.

#### Is this the same as machine hour rate?

**Answer:** Close. A machine hour rate usually covers machine-related overhead only, while a burden rate may include shared factory overhead. This tool lets you choose which costs go into the pool; the formula is the same.

#### Does it handle activity based costing?

**Answer:** Not directly. It gives one rate per cost pool. For activity based costing, run it once per pool and sum the contributions per operation.

## Search terms

epicor resource group burden rate, epicor production burden rate, machine hour rate calculator, overhead absorption rate calculator, epicor routing cost, burden rate calculation manufacturing, epicor resource group setup

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