Overview
Production overhead standards planning (by cost center) is a part of the overall financial planning process.
Through this process you can quickly diagnose whether you need to set or adjust overhead rates (standards) for a business unit (cost center).
This involves entering planned figures for expenses and statistical key figures for a particular business unit and planning period.
These standards will be used to calculate product standard costs.
As a result of the process, the production overhead standards are planned and available for the planning period.
Plan production overhead standards flowchart
Paths
Path | Manufacturing → Master data → Production overhead standards |
|---|---|
| In-app link EN code |
e1cib/command/Document.SetProductionExpenseStandards.Command.ProductionExpenseStandards
|
| In-app link RU code |
e1cib/command/Документ.УстановкаНормативовПроизводственныхРасходов.Команда.НормативыПроизводственныхРасходов
|
How to review applicable overhead standards by business units
1. Go to Manufacturing and click Production overhead standards under Master data.
2. Go to the Created tab.
3. Review the list of overhead standards already set for current and past periods.
4. Go to the Past period reference tab.
5. Specify the Setting period and Cost analysis period.
6. Review the list of Business units for which overhead costs have been allocated in previous periods but are not set for the current period.
Paths
Path | Profitability & cost → Income and expenses → Expense allocation |
|---|---|
| In-app link EN code |
e1cib/list/Document.AllocationOfOtherCosts.Form.WorkplaceForm
|
| In-app link RU code |
e1cib/list/Документ.РаспределениеПрочихЗатрат.Форма.ФормаРабочееМесто
|
How to review past period allocation base amounts
1. Go to Profitability & cost and click Expense allocation under Income and expenses.
2. Select and open the appropriate Expense allocation document.
3. Click Reports → Line of business — allocation base and find the allocation base Amount.
How to create production overhead standards
1. Go to Manufacturing and click Production overhead standards under Master data.
2. Go to the Created tab.
3. Create a new Set production overhead standards document.
Or
2. Go to the Past period reference tab.
3. Select the relevant reference and click Generate to create a new Set production overhead standards document.
4. Go to the Main tab.
5. Select a Company and a Business unit.
How to plan variable overhead rates
Automatic filling
1. Go to Manufacturing and click Production overhead standards under Master data.
2. Open the required Set production overhead standards document and go to the Variable costs tab.
3. Click Fill → Expenses of the previous months.
4. Enter the number of past months for data selection.
The system will automatically fill in the Expense item, Amount, and Allocation base columns based on the previous months' statistics and calculate the Standard column.
5. Post the document.
Manual filling
1. Go to Manufacturing and click Production overhead standards under Master data.
2. Open the required Set production overhead standards document and go to the Variable costs tab.
3. Add a new line, select the Expense item that has the Variable attribute enabled and is directly related to the production volume.
4. Enter the variable overhead absorption rate (calculated manually or in the external system) in the Standard column.
5. Post the document.
Note
The planning standard for variable costs is constant and does not depend on the size of the allocation base.
How to plan fixed overhead rates
Automatic filling
1. Go to Manufacturing and click Production overhead standards under Master data.
2. Open the required Set production overhead standards document and go to the Fixed costs tab.
3. Click Fill – Expenses of the previous month.
The system will automatically fill in the Expense item, Amount, and Allocation base columns based on the previous month's statistics and calculate the Standard column.
Manual filling
1. Go to Manufacturing and click Production overhead standards under Master data.
2. Open the required Set production overhead standards document and go to the Fixed costs tab.
3. Add a new line, select the Expense item that has the Fixed attribute enabled and does not depend on the production volume.
4. Fill in the Amount column. The system will automatically set the Allocation base in accordance with the Expense item.
Note
Fill in the total amount of budgeted expenses for this unit.
In case of a change in the expense item Amount or Allocation base, update the fixed overhead cost standards.
5. Enter the fixed overhead absorption rate in the Standard column.
6. Post the document.
How to review production overhead plans
1. Go to Manufacturing and click Production overhead standards under Master data.
2. Go to the Created tab.
3. Select the created document.
4. Click Reports → Production overhead standards and review the Plan columns to check the set standards.