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Over head costs

Hi All

I have to apply Admin over head cost to the production order.

Admin over head is posted to 520100 GL code

MY Cost compnent structure:

Raw materail: consumption cost element 400100

actvity type1: 920100

activty type2: 920200

Now If I want to apply admin over head using costing sheet, i cannot use 520100 cost element as my base ?, i should always use either my activity types or raw materials as my Base for caliculating over heads, Is that a true statemnt?

And also the only way of posting over head in product costing is through costing sheet?

Plese let me know If there are any other ways of allocating over head cost to products in product costing?

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  • Best Answer
    Posted on Oct 21, 2008 at 05:40 PM

    Hi,

    Use overhead calculation to allocate overhead through percentage-based or quantity-based overhead rates. The basis for the allocation is the primary cost elements that you posted as overhead costs. In the manufacturing industry, for example, these are usually the labor and material costs.

    To perform an overhead costing, you need to define control data during Customizing and include this in a Costing Sheet. The Costing Sheet combines all parts of the overhead costing and determines the rules for calculating the values to be posted. The Costing Sheet is comprised of a Calculation Base, Overhead Rate, and Credits.

    The Calculation Base defines the primary cost elements to which a particular overhead is to be applied. The Overhead Rate determines to what extent the percentage-based or quantity-based overhead rate should be applied to the direct costs. It also specifies under which conditions (dependencies) the overhead rate is to be applied. For example, you can calculate a defined overhead rate for each plant by specifying a plant dependency.

    The Credit specifies the credit object and the credit cost element. When overhead is applied to an order in the actual, another object is credited at the same time (such as a cost center or another order). You allocate the overhead using a special overhead secondary cost element (category 41).

    check this link for cost sheet

    http://help.sap.com/erp2005_ehp_01/helpdata/en/7e/cb815143a311d189ee0000e81ddfac/frameset.htm

    hope this helps you.

    Thanks,

    Rau

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