Planned & Actual Overhead Rates

Hello friends..
In the costing sheet, under the percentage overhead rates..
Can someone please tell me what is the basic difference between the Planned Overhead rate (Overhead type 2) and actual overhead rate (overhead type 1)?
Please explain..
Regards
Shiv

Well, usually we maintain the same percentage for both plan and actual. Just for appreciating the difference, I indicated to try with a different %. This could be having an use too, where the planning is done at beginning of the year and later in the year, you land up in under absorption, you may want to absorb more on production order, you could resort to.
In cases of activity pricing, you can run an actual activity pricing, that can re-calculate the activities. But for indirect overheads, where costing sheets are used you can only change the actual (type 1) percentages.
Well the purpose of standard costing is to set a standard and monitor the variances as we produce. Whatever changes to actuals are made, anyway will be disclosed during the variance calculation.

Similar Messages

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    Is there something like this for overhead rates? p.j. if your actual rate is $3.00 by produced unit. Then at the end of the month is there any transaction that compare actual expenses and actual production and determine new rate? example $3.5. In order to revaluate production orders?
    Thanks

    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....
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    You need to decide on what basis you would like to absorb your overhead... Say, Machine hrs, lab Hrs or Output.... Lets assume you choose Output (KG) to absorb the overhead
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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....
    4. The PP Guys will confirm the operation in PP... This Act Type will also get confirmed along with it
    5. Now calculate Act Price KSII as usual and run revaluation... From this point onwards, follow the normla procedure which you follow in month end
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  • Overhead Rates Maintenance in DEV,QAS & PRD Systems

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    Points will be awarded for sure for worthy answers.
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    Hi,
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  • How to Close Planned Overhead Rates after production order/ CK40N

    Hi,
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    Kindly advice me
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    Hi,
    If i understand you correctly,currently your planned overhead rate is 3% and you wants to change to 2%.
    if this is the case goto your Overhead rate in configuration and copy overhead rate key which is with plan overhead type(2). and change 3% end as of today and copied one with new rate (e.g 2%) as of tomorrow and till end of life(12/31/9999)....
    hope this helps you.
    Thanks,
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    How to close the planned overhead rates which we have maintained in the KP26 transaction after excuting Material Cost estimate?
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    Hi,
    Goto OKP1, enter your controlling area,version and fiscal year.then click on "PLAN"(F6) icon at your left side top.you will see transaction and period in new window.
    here you can check the boxes under particular period.
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    My scenario is:
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    Snigdho.

    Hi
    Since you mentioned catg 43 cost element, I thought you are using Activuty Type
    To apply overhead on the product during CK11N, you need not plan any value on the cost center... The values planned in the cost center can not be used as a BASE in your costing sheet....
    It goes like this
    1. Your cost estimate has BOM + Routing
    2. So, the cost elements that you would see during CK11N, can be broadly classified into 3 types
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    b. Secondary cost ele (Catg 43) - If you use any actvity type in the routing
    c. Secondary cost ele (Catg 41) - These cost elements are parasites... They need some basis to calculate the overhead value... That basis can be either the (a) or (b) above.....
    I think, what you are planning to do is Plan Primary cost ele in a cost center and trying to use the same as the Basis.. That wont work!
    What you need to do is
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  • Actual Overhead Cost Splitting

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    Dear Mr Ajay,
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    Thank you for prompt reply.
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  • How to configure QTY per TON overhead rate for Output material

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    hi
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