Overhead Basis
Select the overhead applied basis. The following sources determine the fixed and variable rates for Labor, Material, and Machine:
- Material: The Fixed Matl Ovhd Rate and Variable Matl Ovhd Rate fields on the Current Materials, Job Materials, Production Schedule Item Materials, and Production Schedule Release Materials forms are used in the calculation of material overhead. The overhead updates the WIP when you issue the material to the job.
- Labor: The Fix Ovhd Rate and Var Ovhd Rate fields on the Current Operations, Job Operations, Production Schedule Item Operations, and Production Schedule Release Operations forms are used in the calculation of labor overhead.
- Machine: The Fix Mch Ovhd Rate and Var Mch Ovhd Rate on the Current Operations, Job Operations, Production Schedule Item Operations, and Production Schedule Release Operations forms are used in the calculation of machine overhead.
If you do not select any of these fields, the system does not calculate overhead. If you select these fields on the work center, it will calculate overhead.
Use the table below to determine which overhead rates are used:
| Production Method | Item Cost Type = Standard | Item Cost Type = Actual |
|---|---|---|
| Job | Posted to journal = rates on Standard Operations and Materials
forms
Actual = rates on Job Operations and Materials forms |
Posted to journal = rates on Job Operations and Materials forms |
| Production Schedule | Posted to journal = rates on Standard Operations and Materials
forms
Actual = rates on Production Schedule Item/Release Operations and Materials forms |
N/A |
| JIT/KANBAN | Posted to journal = rates on Current Operations and Materials forms | Posted to journal = rate on Current Operations and Materials forms |
Follow these procedures if you are using Standard costing for an item and you update this field. You can find both procedures under the Inventory Control Utilities:
- select the Current BOM Cost Roll Up Utility
- select the Roll Current Cost to Std Cost Utility
Following these steps will prevent erroneous variances as a result of updating this field.