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Overhead calculation for Production order


We have a scenario for a new plant in our company.


Overhead calculation loaded to the Production order should be like below:

Electricity, water and office overheads posted to cost elements till 31.12.2012 : say 100000

Quantity produced last year: 10,000

If we are producing 100 kgs in a production order, when KGI2 is run the system should calculate for that production order like below:

(1,00,000 OMR/10,000 KGS)*100 kgs which is qty of prod order.

the same way for another production order but the amount would change (100000 may become 102000) but the qty produced last year will be same.

Where we need to give this calculation apart from cost sheet configuration

currently we have defined percentage overhead rates but no wher i am not able to give this calculation.

becouse of this when i run KGI2 for production order the overhead calculation value is zero even though we have given base.

Pl help



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1 Answer

  • Best Answer
    Dec 04, 2012 at 08:13 AM

    Hi Sandeep,

    If you want to charge or push 100% OH cost to production order can use template allocation method. Through costing sheet you can charge only approximate amount and not full amount. Still it should give Some value in the order. Pls check OH% rates and assignment of OH group in the material master. Also check whether costing sheet assigned or not in the valuation variant tab of costing variant (okk4).


    Srinivas salpala

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    • Sandeep,

      As I told you earlier if it is % based use costing sheet or you want to charge 100% use template allocation. Other options of charging OH would be you can use activity method. Create an activity type and values would be e.g.. give 5 in plan qty (kp26) and amount should be 5 in KP06. When u run KSPI it will give price value 1 per unit. The same process for actual cost.

      The same cost centre assign in work center and hit the product costing based on requirement.


      Srinivas Salpala