deprecation cost in cost sheet

[Former Member]

Dear All,

I have one doubt in case of overhead calculation.

We have configure production overhead as 2.7% in cost sheet which will be calculated on Consumption of Raw material. .i.e. at the time of material issue to production order Mvt. 261.

Now finance department is asking to incorporated deprecation cost in cost sheet.

As far i understand overhead is only calculated on Material Consumption only, then how can i add deprecation in it.

Regards

Shayam

[former_member588855]

Dear Shayam,

Overhead 2.7% in cost sheet must be the planned rate. The actual rate must be changed every month.

In my organisaton, we have defined depreciaition cost in cost sheet as % of RM consumption on order.

The way you have defined overhead other cost can also be defined in the similar manner.

Regards,

Divraj

[Former Member]

HI,

the cost sheet contains base rows and a overhead value is calculated based on this base row definition. You can define base row(s) for whatever your need is (not only raw materials,...).

Apart from that, manufacturing companies often have depreciation cost as part of their activity rate so its not added to the product as overhead cost but as production cost consumed from the product to be produced (eg time confirmation x activity rate).

So it depends on your business case which way you choose.

Best regards, Christian

[Former Member]

Thanks for reply,

I dint get, i request you to explain it again.

I have one GL for Deprecation and accordingly i have created one calculation base in cost sheet and assign that GL and overhead rate & Credit then how system will pick the cost of deprecation and in what proportion does it distribute. the value.

I am totally unaware about it.

Shayam

[ajaycwa1981]

Hi

I agree with Christian

Dep is mainly related to machinery/building used in the production...Divide the depreciation amount by machine hrs activity type and calculate activity rate

Costing sheet does not make sense for depreciation

br, Ajay M

[Former Member]

thanks for reply,

i agree with you, but there is a limit of 6 activity type use in Production order and we have already used Six of them.

so no other option left

Regards,

Shayam

[ajaycwa1981]

Hi

Use one more operation in routing and confirm it... Or using a BAPI Program, confirm the same amount of machine hrs in 2nd operation copying it from the machine hrs in 1st operation

I did it once.. If you are interested in the solution, let me know... However, its not an easy prorgram to code and requires good time to stabilize

br, Ajay M

[Former Member]

Hi Shayam,

Usually if u r in a mechanised factoy, depreciation will be part of your machine hour cost. I can't see any value addition to have it as a separate activity if u are already having machine houras one. (Please correct me if i'm wrong) . But can i know which all activities are you confirming in a production order? Usually production people find it very hard to confirm more than two or three activities, so i'm slightly surprised to hear that all the 6 are exhausted.

Best Regards

Vimal

[Former Member]

Hi Ajay,

It will be help full if you guide me as how to implement BAPI.

Regards,

Shayam

[Former Member]

Hi Christian,

Issue Solved

Thanks & Regards,

Shayam