Overhead cost

[rajesh_sutar2]

Hi PP Experts, Can anybody please tell me which cost are included in overhead cost.i.e Overhead cost means what.

[rupesh_brahmankar3]

Dear,

Costs , as you may very well be aware, are direct ,or indirect. The indirect costs - such as costs on welfare, subsidies, canteen,energy,transporation etc. are called over heads. Overheads are again classified into : (1) Production overheads (2) Commercial & Administrative overheads - This is dependednt on where the incidence of cost occur.

Overheads are generally calculated as a percentage of direct costs such as labour / material.

We maintain it in Costing sheet, % of OH and Transaction code KA06

In KZS2 Overhead key is maintain in Nos. unit & material is maintain and % wise (qty wise in KZM2)

Regards,

R.Brahmankar

[former_member196398]

Raja,

It all depends on what you are defining in Costing sheet. In costing sheet you can define percentage based on Raw Material cost, Activity Price.. etc...

Overheads are basically indirect fixed costs of a manufacturing section, which needs to be transferred to the product.

Regards

Prasobh.