Cost Type To be use for Factory Overhead

Hello,

I want to add one of the Cost Type component as Factory Overhead to an Item. So which cost type I can use for it which is already exist in the UDC's.

Or do I need to create a separate Cost Type as Factory Overhead under "X" type. Also I would like to know the process how can I add Factory Overhead of 168$ as a cost component to an item.

Below is what I did but I am not sure if this is correct or not. Refer below screenshots.

I want to have Factory Overhead as 168.

So I have updated Simulated Rate as 10 for Rate Code=0003 & mentioned the Simulated Factor as 16.8. So that its gets updated to 168.