PS

[Former Member]

Hi Friends,

In PS module what the use of overhead cost controlling and asset accounting(capitalize the cost of internal orders ) and where can v use these two.

[Former Member]

Hi,

Overhead cost controlling is used in Period end closing in PS.We can use overhead calculation to allocate overhead costs to activities and WBS elements.Also it is used to calculate overheads in the planned, commitment and actual values.The costing sheet determines which overheads are calculated, and to which objects (cost center, internal order or process) the overheads are credited.

Overheads are calculated using a costing sheet.Cost elements or cost element areas are collected in base lines. Example: B000 - cost elements 400000 ... 410000 - all costs for raw material

An overhead is calculated for one or more base lines.Each overhead posting leads to a credit posting referencing a cost center or an order and made under a credit cost element.

In capital-investment projects, multilevel settlement is preferable to direct settlement.

A basic rule to follow is that you first settle all the costs to the WBS elements which are flagged for the capital-investment measure. You can then use these WBS elements as the base for capitalization in the asset under construction, and for settling components which cannot be capitalized to receivers outside the project

Regards

Tushar

[Former Member]

Hi

Overhead cost is calculated on the materials as well as the activities performed in the project. Overhead rate is maintained in the costing sheet, and it is a part of costing variants used in the networks of project.

Asset accounting is integrated with PS to cater the requirements of "investment" projects.

Regards