How to maintain overheads? Either through KP26 or KZZ2-Overhead Rates?

Hi,
We have one client with business cement manufacturing.The manufacturing follows 3 stages.Such as...
1 Stage is Raw mix
2 Stage is Clinker
3 Stage is Cement
So far they dont have the production.They are supposed to start the production.In this case,what we can suggest for the overheads either KP26 or KZZ2 overheads rate through Costing Sheet.
What are the differant overheads that are to be considered in this process? Kindly advice me..
Thanks
Sunitha

Another thing to consider would be that you could use either a Costing Sheet or you an Activity Type for Overhead.  Although your client has a fairly straightforward manufacturing process they will still need to apply Overhead in some manner.  As an example, the Overhead at your client may contain costs arising from Purchasing salaries, Production Control office supplies, Production Equipment depreciation expenses, etc., etc.   It also depends on how they 'apply' the Overhead.  Are they applying it based on Labor Hours, Material Consumed, or a Per Unit Basis, etc., etc.  You will need to make sure that you apply the Overhead at the appropriate 'spot' in the manufacturing process.  In other words, you will need to make sure that you are applying the Overhead that's associated with a particular labor operation at that point in the manufacturing process and not earlier or later in the process.
Edited by: Hilary Hagblom on Nov 30, 2008 6:49 PM

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