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The distribution of manufacturing overhead costs to individual product unit, or production batches generally, requires a base or a cost driver, to which reference a rate, known as material burden rate applies. Material burden is the amount of manufacturing overhead costs that a unit of the base carries.
The two situations in which the burden rate is used are: 1  Labor. 2  Payroll taxes and benefits are added to an employee's wages to arrive at the total cost of labor for that individual. 3  The burden rate is the dollar amount of burden (i.e., overhead) that is applied to one dollar of wages.