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Overhead rules in SAP ByDesign

Hello,

I want to have a clear process on how to manage overhead absorption on Production lots using 'overhead rules; and 'overhead rates' with clear examples.

I have gone through the SAP ByDesign guides but it is not quite clear.

SAP documents rightly mentions that 'overhead' rates are calculated outside of the system using an appropriate calculation base and the relevant cost. The relevant cost is divided by the appropriate allocation base (for example hours). This gives the cost per hour. However in the system we need to input the overhead rate as a percentage (%) of the GL Account (origin) which is the only calculation base.

It is also not clear how the overheads will be absorbed into the production lots. Will it be based in proportion to the number of production orders?

Can you please provide any reference document which clearly explains these processes.

Thank you,

Narayanan

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2 Answers

  • Dec 06, 2017 at 08:46 AM

    Dear Narayanan RAGHAVAN,

    Up to now ByDesign system does not have functionality with which overhead cost based on operational quantities can be calculated.Overhead calculations are conducted with a periodical run. For this the rule can be maintained in Work center "Cost And Revenue" - Allocation Overhead Rules.
    These rule included always a percentage surcharge on the specific cost of operations and materials.

    If you need such functionality you can use the following approaches:
    -Approach your project manager or SAP contact to see if they can help.
    -Submit an idea via the SAP Business ByDesign Ideas Forum: https://ideasbydesign-en.ideascale.com/
    -Approach the Service Center (servicecenter@sap.com) to see if they can fulfill such specific request.
    Note: The services of the SAP Cloud Service Center will be charged as packaged services based on fixed prices.

    Best Regards

    Yuran

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  • Jan 05 at 03:06 PM

    Yuran,

    Thanks for your answer. I appreciate it.

    Best Regards,

    Narayanan

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