Understanding Overhead Rule Assignments

You assign overhead rule for the system to determine how to calculate overhead for the business units associated with a joint venture. You can assign an overhead rule to any level in the hierarchy below:

1. Joint Venture Company

2. Joint Venture

3. Joint Venture Parent Business Unit

4. Business Unit

Depending on the complexity of your joint venture, you might require several assignment records of overhead rule to determine which overhead rule to use for each business unit. For example, the majority of your business units might use one overhead rule. In such a case, you would create an assignment record at the company level so that all of the joint ventures and business units under that company use this assignment record. If there is a business unit that you want to exclude from the company group, you must create a specific assignment record that identifies the overhead rule name to use for this business unit.

When attempting to retrieve overhead rules to calculate the overhead, the system uses a hierarchical search through the assignment records starting with the lowest level in the hierarchy (Business Unit), and overriding the records that are assigned to the higher levels in the hierarchy (Joint Venture Parent Business Unit, Company, and Joint Venture).

You use the Overhead Rule Assignments program (P09J57) to assign overhead rules. The system stores this information in the Overhead Rule Assignments table (F09J57).

You can access the Overhead Rules and the Joint Venture Master program from the form menu on the Work with Overhead Rule Assignments form.