Entering Information for Calculating Overhead Using the Fixed Amount with Escalations

When you select the Fixed Amount with Escalations method in the Overhead Method drop-down menu, the system displays the Fixed Amount with Escalations subform.

To enter information for the fixed amount with Escalations method:

1. Complete the required fields:

   • Base Amount

     Enter the base amount that the system uses to calculate the overhead.

     This amount will be calculated as overhead for all the operational statuses of the joint venture or business unit.

   • Base Year

     Enter the base year that is specified in the joint venture agreement. You must enter the values in format YYYY.

   • Base Month

     Enter a month in a calendar year that is specified in the joint venture agreement.

     Note: In the case of acquired business units that have existing overhead agreements to maintain, the base year, base month, and base amount should be based on the acquired month, year, and escalated amount for the acquired month.

   • Escalation Index

     Enter a value that specifies which escalation index to use. The values used in this field must be available in the Escalation Index table (F09J60).

2. On the Exception Operational Status By section of the subform, select either the joint venture or the business unit option. By default, the joint venture option is selected.

3. Optionally you can complete these fields:

   • Operational Status

     Select an operational status from the Operational Status drop-down list.

   • Chargeable Months

     Enter the number of months for which overhead is charged in the Chargeable Months field.

     Chargeable months are the number of months for which overhead is charged when the joint venture or business unit is at the specified operational status.

     If you do not want to calculate overhead for a particular operational status, then you need to add that operational status as an exception status with chargeable months as zero.