Overhead
Overhead costs, such as electricity or general storage costs, can only be traced indirectly to
the products that caused them. You can allocate these overhead costs in the following ways:
Overhead rates
In the conventional method, overhead is applied to the reference object as a percentage
or quantity-based rate. The overhead is applied by means of costing sheets.
See also: Applied Overhead
Template allocation
With template allocation, cost drivers are used to assign overhead to the reference object
on a source-related basis. The overhead is applied by means of templates. Sender objects
can be business processes or cost centers/activity types.
See also: Process Costs
Integration of business processes into the routing
Assigning process costs to routing operations is particularly suitable for direct production
processes. Indirect processes, however, should be assigned using templates.
See also: Process Costs
Integration
Overhead is assigned from Financial Accounting (FI) to the cost centers in Cost Center
Accounting (CO-OM-CCA). If you use Activity-Based Costing (CO-OM-ABC), overhead is
allocated from Cost Center Accounting to the business processes of Activity-Based Costing.
The overhead costs are in turn passed on from Cost Center Accounting or Activity-Based
Costing to Product Cost Controlling (CO-PC).
You can transfer the costs from Cost Object Controlling to the following:
Financial Accounting (FI), to valuate finished and unfinished products, for example
Profit Center Accounting (EC-PCA)
Profitability Analysis (CO-PA)
Material Ledger/Actual Costing (CO-PC-ACT)
You can pass on overhead costs that have not been applied to a cost object (such as sales
and marketing costs) directly from Cost Center Accounting or Activity-Based
Costing to Profitability Analysis.
Features
You can calculate both planned and actual overhead. You can also apply overhead to process
costs. You can use overhead calculation for all the cost objects in the system.
You can calculate planned overhead costs in the following:
Product cost planning (non-order-related material costing)
Preliminary costing of manufacturing orders (production orders and process orders),
and product cost collectors
Sales order cost estimates
Order BOM cost estimates
Calculation of planned costs for general cost objects
Preliminary costing for internal orders
You can calculate actual overhead costs at period-end closing in Cost Object Controlling
based on the actual costs or quantities incurred thus far.
For more information about calculating overhead in manufacturing orders, product cost
collectors, general cost objects, and sales order items see the following sections:
Product Cost by Order
Product Cost by Period
Product Cost by Sales Order
Costs for Intangible Goods and Services
For more information about calculating overhead costs, see the following sections: