Epicor Resource Group Burden Rate Calculator
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.
Your numbers
Depreciation, power, maintenance, tooling, supervision and floor space allocated to the resource group.
Machines multiplied by scheduled hours per month.
Your results
Illustrative absorption costing. Your accounting policy and Epicor costing method determine what is actually posted.
Cost rate vs planned utilization
Sweeps Planned utilization from 30 to 95, holding your other inputs fixed.
Rate and variance review
Optional: an expert can compare your resource group rates with posted variances.
Optional. The tool and every export work without this. No spam.
How to use it
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.
- 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
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
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
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.
Frequently Asked Questions
Where are burden rates set in Epicor?
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?
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?
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?
Not directly. It gives one rate per cost pool. For activity based costing, run it once per pool and sum the contributions per operation.
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.
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