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Transporting Overhead Rates

by Paul Ovigele

September 11, 2011

Paul Ovigele, Ovigele Consulting

Production overhead rates can be used to calculate the cost center costs that are not reflected in the activity rates. They can be calculated on a percentage or quantity basis, and are usually based on some element of the production process such as materials consumed, labor costs or machine costs. All the components needed to calculate overhead rates are contained in costing sheets (maintained in transaction KZS2). These components are explained below:

(1)    Calculation Base: This is the cost element (or group of cost elements) that the overhead rate is based on. For example if the overhead rate is based on Material costs, the cost elements specified here will be the consumption account of the material type (which is configured in transaction OBYC under transaction key/account modification GBB/VBR). If the overhead rate is based on a production activity such as labor or machine costs then the cost elements specified is the “internal activity” cost element that is defined in the activity type master data in transaction KL01.

(2)    Overhead rate (%): This is the key that holds the plan and actual percentage rates that are applied to the calculation base. These rates are usually entered by validity periods and are not normally transportable between clients

(3)    Credits: This represents the cost object that is credited when the overhead amount has been established and is passed on to the receiving cost object. For example, if you specify a cost center as a ‘credit’ object, this cost center will be credited (and the manufacturing order debited) when the ove rhead calculation transaction CO43 is run.

One frustrating issue with maintaining overhead rates is that you cannot easily transport these rates from one client to the other even when automatic recording of transports is turned on in the respective development client. In fact when you are in the process of maintaining the overhead rates, you will usually get a message saying “Individual entries cannot be put into the change request”. When you save your changes, a transport request can be created, but when you release it to the target client, the rates do not show up in that system. This leaves many users having to open up the production client (which violates the policies of many businesses) in order to maintain the rates.

However, there is a program you can use to include overhead rates in a transport request. When you have saved the rates to the transport request, release the request and move it to the relevant target client. You can then go to the target client and go to transaction SA38, enter program RKAZUTR1 and hit the execute button. You will see a field called “Transport request / task”. Enter the transport request that you released in that field and hit the execute button. You will then get a message saying “Post processing closed successfully”. When you go to the overhead maintenance transaction (KZZ2) you will see that the overhead rates have been transported successfully. Note that if you want to move specific overhead rates (that already exist) into a target client, then you first need to execute (using transaction SA38) program RKAZUTR0 in the source client. Here you will need to enter the relevant overhead rate and hit the execute button. You will then be prompted for a transport request. When you enter the relevant transport request, this overhead rate will be included in the request and can therefore be imported into the target client using program RKAZUTR1 as described above.

For more infrormation on how to optimize your SAP Financials landscape, I've put together my top tips in the book 100 Things You Should Know About Financial Accounting with SAP  which is published by SAP Press.

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