overhead costs are often allocated to sets of produced goods based on the ratio of labor hours or costs or the ratio of materials used for producing the set of goods. overhead costs may be referred to as factory overhead or factory burden for those costs incurred at the plant level or "overall burden" for those costs incurred at the organization level. where labor hours are used, a "burden rate" or overhead cost per hour of labor may be added along with labor costs. other methods may be used to associate overhead costs with particular goods produced. overhead rates may be standard rates, in which case there may be variances, or may be adjusted for each set of goods produced.