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The overhead needs to be allocated based on the product net weight. When I setup the material overhead, it’s not getting added to the product cost.

I have done the setup as follows:

Cost element;

 

Cost Bucket;

 

Cost Template;

 

Part specific OH;

 

Part cost window shows the part specific overhead but it’s not getting added to the product cost.

 

 

Does anyone know how to resolve this? 

Hi! Please bear in mind that you define your material overhead cost at child-level (a sub assembly or a purchased part). But when you calculate cost the level cost shows up at parent level. In IFS, Material Overhead Cost is associated with the indirect cost that occurs on the shop floor when components are being issued.

Hope this helps

-Mats

Hi Mats,

Thank you for the reply.

Can you clarify below points;

  1. Can’t we setup a material overhead for a parent part (FG) directly?
  2. The material overhead should be configured as “Indirect” in cost bucket?

-Dharshan-

Hi Dharshan,

  1. Nope - impossible. On that level you can try out General Overhead Cost.
  2. It is not a must. Typically overhead cost are indirect… but the attributes on Cost Bucket like Direct/Indirect and Fixed/Variable is more of “FYI”

Hi Mats,

Thanks for the prompt response, really appreciate it!!

Your reply is really useful.

My requirement is to setup a overhead for the product (FG). This needs to be configured based on the product weight. For. example: Per unit weight (kg) overhead is Rs. 8 and if the product net weight is 5 kgs then the OH should be Rs. 40 (Rs. 8 * 5 kgs).

I have tried to setup a general overhead, in this case the entire cost for the shop order lot size is getting charged to the product. If we are creating a shop order for 100 units and completing 80 units the OH should get absorbed for the 80 units. How to do this?

Thanks,

-Dharshan-

Hi,

But let say 20 of them was scrapped, shouldn’t that be captured as well? The cost might have occurred right?

Anyway, General Overhead is only re-calculated upon shop order close when we use Percentage of Part Cost as “Overhead Cost Unit”. So that is the hard truth, sorry...

BUT I kind of agree that it would be nice to be able to improve core so that also Fixed Value per Unit or Fixed Value per Weight Unit could be recalculated upon shop order close.

-Mats

Hi Mats,

Means there is no way to handle that requirement in IFS for the moment.

Anyway, Thank you so much for the details!!

-Dharshan- 

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