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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 burden rate is the allocation rate at which indirect costs are applied to the direct costs of either labor or inventory. You should add burden to the direct cost of either labor or inventory when you want to present the total absorbed cost of these items. The two situations in which the burden r