| # Overhead Overhead represents indirect costs, for example electricity, that impact all manufacturing costs, except for direct labor and direct material that change depending on production volume. Overheads are those costs required to run a business, but which cannot be directly attributed to any specific business activity, product, or service. Overhead costs do not directly lead to the generation of profits. Overhead costs Overheads are costs or expenses such as G&A costs, deprecation, energy, administration, insurance, rent, and utility charges, that relate to an operation or the company as a unit, that do not become an integral part of a good or service, unlike raw material or direct labor and that cannot be applied or traced to any specific unit of output. Setting up overhead application bases Overhead application bases are used to make batch overhead applications and to set up bases on which pre-determined overhead rates are calculated. Calculating and applying overheads Overheads are calculated for all application bases, based on the postings in projects and the defined overhead application bases. You can manually start or schedule the jobs to calculate and apply overheads. |