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Production Overhead Rates


What procedures are required for entering both material and production overhead rates? I will need to establish production OH rates for the 3 stages which are in cement manufacturing Raw Mix, Clinker, and Cement Production.For each stage we will execute Costing Run.

Note: We are using Costing Sheet for Material Overheads.

Requirement Is -

1.Now if i want to add Production overheads what should i do?

2.How can i provide the Material and Production Overheads for all 3 stages separately as we need to execute the Costing Run separately for each stage.

3.If we want to provide the different Material and Production Overhead rates for different stage how can i proceed?

4.My doubt is -We are maintaining only one costing sheet but wanted to maintain differant overhead rates for 3 stages.How can i proceed?



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    author's profile photo Former Member
    Former Member
    Posted on Mar 31, 2009 at 12:36 PM

    Define over head groups and over head keys in order to assign different rates based on your requirmenet. Assign over head groups in material masters.

    Suppose you want to apply an overhead rate of 10% to one group of materials and an overhead rate of 20% to another group of materials. To do this, you create two overhead groups and two overhead keys:

    Overhead group Overhead key Percentage

    Mat 10 Mat10 10%

    Mat20 Mat20 20%

    You enter overhead group Mat10 in the master records of the materials in the first group, and overhead group Mat20 in the master records of all materials in the second group.

    The costing sheet for overhead calculation is selected through the valuation variant. You create two lines in this costing sheet. In the first line, you link the percentage 10% to the overhead key Mat10. In

    the second line you link the percentage 20% to the overhead key Mat20.


    ramesh b

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