User Experience Insights
Create Costing Sheet with Multiple OH Rates
Most companies have a need to break down their overhead charges into multiple categories. In order to track this efficiently you need to build your links between Cost Components, Cost Elements and link them to the Costing Sheet. In this document I will demonstrate how to approach this configuration in order to make a change in the cost process for one of the operations.
IMG Menu Path and T-codes
Everything we need to work with when setting this up is mostly contained in
this group of menu items. This is one of those rare occasions where
each line can also be accessed directly by the four digit t codes high
lighted in green.
Current Configuration and Set-up
This screen can be viewed with t-code KZB2 – Define Calculation Base. This needs to be maintained with Cost Elements assigned.
This screen print is KZZ2 – Define Overhead Percentage Rates. Notice these are using Dependency Key D020 which links to the plant. The changes in here also use D010 which links via OH Keys. The rest of this blog will show how you can change the costing sheet due to operational changes.
Cost Component Structure(OKTZ)
This section details which cost elements are being used for the cost components contained in the cost estimates. This company is only using Cost Components 1, 3, 5 & 8
A preliminary step is to create Credit Keys
This organization has Credit Keys for several different operations and/or plants. Now we’ll look at one of the new ones created E17.
On this screen the defaults can be set for Cost Element, Fixed Percentage, Cost Center/Order and or Business Process, this was one of the new ones that were created for the new operation.
Define Costing Sheet(KZS2)
On the screen is where you add or change a Costing Sheet. At this point XP-SOB is being selected for change.
Above you see a common Costing Sheet. Below you’ll see how you can add some new Overhead components.
First step here was deleting OH Rates C086 & C087. A new process and material has been added that has a different Overhead Rate being applied against line 35 Dream Print.
The change required creating 4 new Overhead Rate codes and 2 new Credit Codes.
A key piece that needs to be created is the OH Key. Here keys DM0 and ZI0 were are being used with the ZI0 being the new one added for this new operation.
Define Percentage Overhead Rates(KZZ2)
Now drill down to view the percentages.
Here is where you set the percentages for OH charge. The OH Keys(DM0 & ZI0) are assigned to link to Cost Center and Cost Element auto assignments for specific plants. Overhead Types are 1- Actual OH, 2 – Planned OH.
Another component required in the configuration is the Overhead Group.
These conditions are linked to overhead keys. The overhead key is selected through an overhead group specified in the material master record of the material to be costed.
The overhead groups can also be used to select a template for the allocation of process costs. The template is selected using the combination of costing sheet and overhead key.
In this process you first create the Overhead Key and then the Overhead Groups. The Overhead Groups are then assigned in Material Masters.
Creating New OH Rate Codes Revisited(KZZ2)
The key is the Dependency Key D010. The Fringe and Labor OH screens on the left are for current OH Rates
The two Codes on the right for Fringe and Labor OH are the rates for the new ###### ##### operations.
Notice the two on the left are using OH Key DM0 and the new ###### Operations are using OH Key ZI0.
Define Credit Codes Revisited(KZE2)
Two new Credit Codes were needed as well to assign the new Cost Elements and Cost Center.
Costing Sheet Revisited(KZS2)
The new operation has now been set up for use. The Costing Sheet is a key tool for capturing specific costing elements for product costing analysis. By understanding how this works a business can use the data to help make production planning decisions that can provide the best financial results.
Dear Dan Goodhart
Nice Blog with a good explanation.
Thanks for sharing
Excellent information. Such details are rarely available on any platform, on the click of a button.
Million thanks for sharing,
Hi Dan, excellent, but could you include the business result regarding this configuration? Examples of process scenarios where is possible to analyze the impact of this configuration.
For example, a comparison between a simple Production Order and the impact of this configuration before and after the production order confirmation and settlement. And the reports that we can use to analyze the impact.
This is really impressive explanation and clarification for me !