Understanding Standard Rate and Factor Codes

Standard rate and factor codes represent overhead costs or other indirect costs that you cannot assign directly to a certain production process or operation, but that must be accounted for in the costs of an item. These types of costs include utilities, insurance, research and development costs, rent or lease payments, and other types of operating costs.

Note: Rate and factor codes are user-defined, but you do not use the User Defined Codes program to enter and maintain rate and factor codes. Instead, you use the Generic Message/Rates Records program (P00191) to enter and revise rate and factor codes.

The Cost Simulation program (R30812) uses the rates and factors that you define to calculate the extra costs that appear in the Cost Components program (P30026).