Create Overhead Rates

When you create an overhead rate, you can specify the corresponding overhead rate type and absorption type. You must associate the overhead rate with a cost scenario.

Overhead rates aren't applicable for cost scenarios created using periodic average cost enabled cost books.

1. In the Cost Accounting work area, click the Manage Overhead Rates task.

2. Click the Add icon.

3. On the Create Overhead Rate page, select the cost scenario that you want to associate this overhead rate with.

4. Select the corresponding inventory organization and specify whether you're defining a plant overheard or work center overhead.

5. For a plant overhead, select the required Item Category and Item.

   If you're defining a work center overhead, then select the required Work Center and Resource Type.

6. In the Details region, click the Add Row icon.

7. Select the appropriate Cost Element, Expense Pool, and Absorption Type.

8. Depending on the selected Absorption Type, enter the Rate for percentage values or the Value for a fixed overhead absorption.

9. Click Save and Close.