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Indirect Overheads or administration overheads using costing sheet

Jan 04, 2017 at 12:18 PM


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Hi Experts,

I have a query regarding costing sheet.

We defined a costing sheet which actually works fine when we define the base as material consumption accounts in KZS2 and overheads calculated based on quantity. But the requirement is to calculate the overheads based on administration GL accounts or simply put the maintenance GL accounts.

So how can we set this up in costing sheet? even if I give the maintenance GL, this wont be considered for calculation as I myself can clearly see there is no relation to this GL when running CK11N (exploding BOM) or plan overhead calculation in a process order. As these GL accounts will not be directly referred there.

Hence please advise how to setup the indirect overheads using costing sheet.

Tried googling and forum extensively but could not find an answer. If you have a link on how to go about this, please share.

Thanks and highly appreciate time and inputs,

Hari D

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2 Answers

CMA Ramesh Kolluru Jan 04, 2017 at 01:51 PM

Hi Hari,

Good Day!!!

If i understand your query properly, below is my clarification:

1) Requirement: To calculate Admin OHs with BASE having 'Admin/Maintenance GLs'. But, as Order (Production or Process) doesn't have any direct relation to these GLs, CK11N/CK40 are not capturing these GLs.

2) My Views: Predominantly, Costing Sheet facilitates to calculate overheads on a BASE which has impact on the Cost Object (i.e. order). So, overheads (i.e. Indirect Costs) have to be charged on these 'BASEs' which are nothing but 'Direct Costs' (i.e. Direct Material, Direct Labor, Direct Expenses). In other words, 'Admin/Maintenance GLs' cant be part of these 'BASEs' as they themselves are 'Indirect Costs'.

3) Solution: Generally, organizations take trend of 'overheads (=indirect costs)' and calculate as a percentage of direct costs (=DM or DL or DE) as Indirect costs are occured for the sake of direct costs. Hence, i suggest you to take such trend of 'Admin/Maintenance GLs' as a percentage of 'Direct Materials/Direct Labor' (for atleast 4-5 years) and create overhead rate accordingly (but keeping BASE as 'DM or DL or DE' only). Hope this is clear.

4) Sharing one previous blog on 'Product Costing in depth' which covers 'Costing Sheet' as well.

Warm Regards,

CMA Ramesh Kolluru

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Bhaskar Basam Jan 05, 2017 at 12:07 PM

I suggest instead of costing sheet try using templete allocation method to apply this overhead using an activity type.

1) Create a activity type for this administration overhead and create a template like below.

2) Put the planning values in KP06 against your maintenance GL codes.

Now run the cost estimate. It will get the desire results.



test.jpg (129.4 kB)
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