Costing sheet and Overhead calculation without product costing environment

[Former Member]

Hi Friends

I am confused with how the costing sheet and overeheads work in a non product costing environment. I want to know how the overheads are calcuated through internal orders or cost centers. In the internal order master data what is the significance of giving Costing sheet and Overhead key.Can somebody explain me of how costing sheet, overhead keys work.

Thanks in advance

kranthi

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FICO Geek

[former_member188826]

If you need to charge indirect costs incurred in a cost center, to an order, you can use costing sheet.

What the costing sheet does is, it transfers the cost from the cost center to the order, usually, based on a percentage. At period end usually we run the process of calculating the overhead. The costing sheet engine enable the order be debited with the cost and the same amount is credited to the sending cost center, through a secondary element.

Let's take an example. Material handling department wants to charge the orders an amount (calculated by applying a percentage on the value of raw materials consumed by the order) You can do it by a costing sheet. The base, overhead rate, Overhead key, credit are the major components of costing sheet. In our example, the Base contains the raw materials consumption cost element. The overhead rate contains the overhead keys (also given in the material master) that has the percentages to be applied for plan and actual separately. The credit tells what cost center to be credited and cost element to be used.

Though the above explains the for product costing environment, this logic can be extended to <b>non product costing environment</b> like internal orders, probably with minor variations. The base will have to contain the cost elements that are likely to be incurred in the order.

[Former Member]

Thanks Sridhar, I got good idea of costing sheet

In non prod costing environment if I assign to the Cost Center the costing sheet and this cost center is used in the GL posting with some labor or material accounts some thing like this

A/C 400000 $2000 CostCenter1

and CostCenter1 is assigned with CostingSheetA and this cost Costing sheet has the CostCenter2 as part of Credit Key, Then is it CostCenter2 the sender of the calculated overhead and CostCenter1 the reciever of the overhead.

Am I correct with respect to cost ctrs or else correct me