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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.
In most electronic product assembly applications the material cost is generally somewhere between 50% and 80% of the total product cost. For a specific electronic product, the actual material/labor cost split depends primarily on a combination of the following factors: 1.his results in an increase in average labor compensation rate (from $20.02/hr to $51.55/hr), but reduces overall labor cost by reducing labor content, including the elimination of in-circuit test as part of the assembly process. The cost components for the three labor rate models are summarized in Table 7. Table 7.