Defining Percentage Overhead Codes

This window helps you maintain percentage overhead codes, descriptions, usage levels, basis level, and optional descriptive flexfield information. The percentage overhead code contributes to the cost of an item.

The usage level (listed below) specifies at what level cost is affected by the percentage overhead code:

• Applied to Ingredient but added to Product (that is, Consumption)
• Applied to Item and added to itself (that is, Direct or Production)

The basis level lets you specify if the percentage overhead should be applied to this level item cost or to the total item cost.

Based on the selected basis option, the Cost Rollup process applies percentage overhead rules either to this level cost components or to all cost components of the item cost.

If you have already set up percentage overhead codes, then select the basis value for these codes. If you do not select the basis value, then the Cost Rollup process considers Total Cost as the default value and applies percentage overheads to the total item cost.

To define percentage overhead codes:

1. Navigate to the Percentage Overhead Codes window.
2. Enter a unique Code that identifies a percentage overhead. For example, SHR. Required.
3. Enter a description for the code in Description. For example, enter Shrinkage for the percentage overhead code SHR. Required.
4. Usage lets you enter at what level cost is affected by the percentage overhead code. The percentage can either be applied to an ingredient but added to the product or applied to an item and added to itself. Required. The two usage options are:
   
   • Applied to Item and added to itself (that is, Direct or Production)
   • Applied to Ingredient but added to Product (that is, Consumption)
   These options let you add percentage overhead cost to an item when it is either produced or consumed. For example, if Item A has associated overhead costs when it is produced, then a percentage overhead code with the usage indicator "Applied to Item and added to itself" should be defined. The percentage overhead incurred on producing Item A is determined by applying overhead percentage to component costs of Item A and added to the cost of Item A. Similarly, if Item A has a type of percentage overhead cost which is incurred during consumption, then define a separate percentage overhead code with usage indicator "Applied to Ingredient but added to Product". In such a case, any product which uses Item A as an ingredient will have percentage overhead costs added to its cost.
5. Basis lets you enter if the percentage overhead should be applied to this level item cost or to the total item cost.
   
   • This Level Cost - Applies percentage overhead rules to this level cost components of the item cost.
   • Total Cost - Applies percentage overhead rules to all the cost components including this level and the lower level of the item cost.
6. The double brackets ([ ]) identify a descriptive flexfield that lets you add data fields to this window without programming.