Activity Prices and Overhead Rate

[Former Member]

Hi,

Can any one tell me know to calculate Activity prices for a manufacturing company in general. what are the factors ( Producton hours/salarys/benifits/overtime etc) need to be considered. How do we come up with Overhead rate. Can any one give a example.

Thanks in Advance,

Sivaram

[Former Member]

hi Sivaram,

The activity groups are hierarchies of activity types. In order to have them appear you have to add them to the group. You use KLH2 to change existing groups. Position the cursor where you want it to appear on the hierarchy then select the activity type button to add it. Then save your changes.

Pls see the below link for more info...

http://help.sap.com/saphelp_47x200/helpdata/en/08/5148e543b511d182b30000e829fbfe/frameset.htm

Ranjit

[Former Member]

Ranjith,

Sorry if my question was confusing. I was asking about how to calculate Activity Prices in general that is Cost Accounting not particularly SAP. I wanted to know as a accountant how should one calculate Labour Price, Overhead Percentage for a manufacturing company.

Thanks

Sivaram

[Former Member]

Hi,

Overhead rates are calculated based on the past data. Overheads means indirect cost i.e. cost cannot be idenfible with a particular cost center or product. These should be allocated based on some basis.

General labour cost is calculated based on labour hours. (Labour cost/labour hours)

factory overhaeds percentage is calculated on labour cost. (FOH/LC) x 100

Administrative overhaeds percentage is calculated on Factory cost. (AOH/FOH) x 100

Selling overheads percentage is calculated on sales. (SOH/Sales) x 100

Machine hour rate is calculated based on machine hours (Total OH/Machine hours)

These are determined based on the past data and will use these rates for determining current year total cost.

Radha

[Former Member]

Radha,

Thanks for the reply, Could you tell me what do you mean by Factory Cost.

Machine Hour Rate is (Depreciation+Maintainance)/Machine Hours right. could you tell me why should we consider Total OH for Machine Hour rate.

Could you tell me how do we incorporate these in cost of the product. i.e through Costing Sheet, but do we have to capture all these cost to diffrent GL Accounts first and set them as Base for Costing Sheet items.

Since we capture all the salarys to one GL Accounts (HR is not implemented) how do we come up with Factory Overhead like Supervior Salaries.

Thanks in Advance.

Sivaram