There are 3 methods to distribute overhead costs to the cost of goods sold for the standard price. In increasing level of flexibility and complexity they are:
Activity Rate: You can either increase the planned activity price to include overhead or create separate overhead activity types. Manufacturing orders are debited and production cost centers credited during activity confirmation.
Costing Sheets: Costing sheets allow flexibility in allocating overhead across products based on cost elements and origin groups. Manufacturing orders are debited and cost centers credited during period-end overhead calculation.
Templates: Templates allow you more options to base your overhead costs on.
SAP costing sheets offer sufficient flexibility to allocate overhead costs in most cases.
You view the configuration of costing sheet settings with Transaction KZS2 or IMG menu path:
Controlling • Product Cost Controlling • Product Cost Planning • Basic Settings for material Costing • Overhead • Define Costing Sheets. The screen shown in Figure 1 is displayed.
Figure 1: Costing Sheet Overview
Available costing sheets are listed on the right of the Overview screen. Select the first costing sheet A00000 and double-click Costing sheet rows on the left to display the screen shown in Figure 2.
Figure 2: Costing Sheet Rows Overview
You can view details of the three costing sheet components by:
Calculation Base: Select any row with an entry in the Base column and double-click Base at the left to display a screen that allows you to enter cost elements and origin groups. Each cost element identifies unique cost types within a cost estimate such as raw material or machining costs. Costs identified by the base are multiplied by an overhead rate to determine the overhead value in the cost estimate.
Overhead Rate: Select any row with an entry in the Overhead rate column and double-click Overhead rate at the left to display a screen that allows you to enter date-dependent overhead rate percentages.
Credit Key: Select any row with an entry in the Credit column and double-click Credit at the left to display a screen which allows you to enter the cost center to receive the overhead credit during overhead calculation
Costing sheets require the additional period-end process of overhead calculation which debits manufacturing orders and credits cost centers.
Summary: SAP costing sheets allocate overhead costs based on cost elements and origin groups.