Complex Product Costing Scenario- Separate overhead rates to same material

Hello- I have a strangely complex scenario at my current client.
They wish to apply different overhead rates to the same raw material (one material number in SAP) which is a part of two different BOMs to the same Semi-Finished product (one material number in SAP). This semi-finished product needs to be costed 2 different ways with 2 different BOMs, routings and overhead rates and then i need to use mixed costing to come up with a blended rolled-up cost to update in the material master of the semi-finished product. I am able to get past all challenges but the only open item is to be able to apply different overhead rates to the same material.
Limitations:
1- We have to use Standard price, not moving average.
2- Split valuation idea thrown out the window.
3- Using 2 different material numbers for the raw materials thrown out of the window.
4- Business area idea thrown out of the window.
basically, coming back to the original issue at hand, the challenge is to be able to apply different overhead rates to one material number in SAP.

Hi
There are available,, But you have thrown them out of the window already
I believe you need to rampup your overhead absorption mechanism... if ovh is dependant on the component, then it should remain fixed/.. however, if it is getting changed bsaed on the parent material, then driver is not the component, but the Parent material
hence, your overhead should be based on Parent material... Assign an overhead group to the Parent material say, 100 and 110 to the 2 Parent materials.... Now you maintain separate % of overhead per overhead group.... BASE would be the raw material consumption cost element
@ Subodh: Do you think above suggestion will work?? I think exit need not be used if I have understood his requirement clear
br, Ajay M

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Dear Experts,
I have a basic understanding that to calculate Material cost estimate data from MM and PP is required.From MM we will get material component data thu BOM and from PP we will get data for activity performed during production thru routing.
Now data from BOM is available but activities are not defined in the system. One plant is equal to 1 work center and all overheads are booked at company code level thru jv irrespective of the nature i.e direct or indirect overheads.No overhead cost is booked against process order currently.
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process orders
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2. The production process of FG`s is muti stage but only 1 work center is created for 1 plant. In 1 process cycle at different stages different fg`s are produced. Is the approach of work center is correct or i have to change it.
3. I need to define cost center, what is the basic funda to consider what should be the cost center.
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Regards
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1. Which overheads are normally booked against:
You have to book direct and indirect over heads through costing sheet. First you have to check with client how they want to charge over heads, based on information provided you have to define cost sheet and attached this in the variant.
2. The production process of FG`s is muti stage but only 1 work center is created for 1 plant. In 1 process cycle at different stages different fg`s are produced. Is the approach of work center is correct or i have to change it.
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3. I need to define cost center, what is the basic funda to consider what should be the cost center
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Hi Deepti
In copy control you will have to redeterfine taxes whilst billing.
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I have to run repetitive manufacturing .
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Error in number management (notify your system administrator)
in help it shows
Error in number management (notify your system administrator)
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Diagnosis
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Dear Nitin,
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Hi Zain
This is a very unusual question
Buddy, there is something in accounting called as "Going Concern Concept" which we all were taught in our accounting days.. That means when you do business, do it with a mindset that you are goinig to do it for long / for ever.. Accidents dont happen every day and you cant build a system around such things
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And insurances not just covers the stock lying consumed, but also stock manufactured and stock in the process of manufacturing (WIP)
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Hi Espinosa
Welcome to SDN!
I guess your question is to check if there is a mechanism to auto calculate the overhead rate in the system....
Sorry, there is no such mechanism.. You need to manually calculate and maintain it in KZM2 or KZZ2... Then revaluate the prod orders with new rate using CO43....
However, I find it painful and boring.. Hence, I have developed a workaround which I prefer to use always...
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3. The Formula in the work center will be fully variable for this Act Type.. i.e. the Act Qty should change in proportion to the Qty Confirmed....
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br, Ajay M

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If i understand you correctly,currently your planned overhead rate is 3% and you wants to change to 2%.
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Requirement Is -
1.Now if i want to add Production overheads what should i do?
2.How can i provide the Material and Production Overheads for all 3 stages separately as we need to execute the Costing Run separately for each stage.
3.If we want to provide the different Material and Production Overhead rates for different stage how can i proceed?
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Supriya

Define over head groups and over head keys in order to assign different rates based on your requirmenet. Assign over head groups in material masters.
Suppose you want to apply an overhead rate of 10% to one group of materials and an overhead rate of 20% to another group of materials. To do this, you create two overhead groups and two overhead keys:
Overhead group       Overhead key         Percentage
    Mat 10               Mat10                   10%
Mat20                Mat20                       20%
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regs,
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Complex Product Costing Scenario- Separate overhead rates to same material

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