Overhead:  The operating expenses of a business, including the costs of rent, utilities, interior decoration, and taxes, exclusive of labor and materials.

Question is coming(问题来拉..) .........................

how to calculate overhead give me full process with t code and how it will comes ?which calculation behind that, and how to set % for this and how it affect ?

Overheads are counted in Product costing and it is mentioned in %

1. Create overhead group - OKZ2 ( maintain this group in costing1  tab)

2. For overhead rates - KZA1 (maintain it in costing sheet)

You have to run the following T-codes  for O/H calcualtion

1) KGI2--Actual O/H calcualtion for single Order

2) CO43--Actual O/H calcualtion for Multiple Orders

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In KZA1 - Select costing sheet --  Select the costing sheet(select standard  or defined by you) and click on costing sheet row -- Non select the row and click on overhead rate  -- Here you can maintain %(percentage)

This cost is considerd while product costing  through  overhead group mentained in Costing 1 tab

Product cost = Material cost + Activity cost (KP26) + overhead cost (%)

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There are multiple ways of calculating the cost of the product:

1. Costing with quantity structure

2. Costing without quantity structure

3. Base planning object used for unit costing.

You can use the costing sheet for to calculate the the overhead cost, which can be material overhead or productin overhead.

If you want to just calculate and see the overhead cost for a predefined rates of overheads then yes, you can use KZA1 for this purpose. You would require to do the below things for that:

1) Maintain overheads rate in costing sheet. Use transaction KZA1

2) for calculating the Material Overhead, system looks for material master --> Costing2 tab where we define material overhead key.

3) Defining Overhead Key in - OKOG

5) In costing sheet row for material overhead - we maintain Overhead rate assinged to a Overhaed key.

Sample Case :

You can maintain a percentage overhead in KZA1 for material and activity ; Based on the % maintained(overhead) ;

IF material cost  incurred is 1000 rs for production order,  If u maintain 5 % means Over head cost of material is 50 rs

after running overhead KGI2 system update the over head cost  ; Same for activity and other overhead

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