Maintain Overhead Rates for Material Costing – A Summary of the Activity

Indirect / Overhead costs related to Inventory Management like handling charges, warehouse maintenance costs, etc., are required to be absorbed on maintenance jobs. Such costs are computed as a burden rate and added to Material or labour cost for recovery analysis and also for setting up competitive pricing for customer jobs.

Examples of Overhead/Burden Cost:

• Cost of Buying Department

• Cost of Inventory Department

• Cost of Production Control Department

• Inventory handle charges

This activity provides the ability to define Overhead % to be charged on Material Cost for indirect expenses like Procurement cost, Freight charges, Packaging charges etc.,

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