Overhead Calculations

  • 22 July 2021
  • 2 replies

Userlevel 1

It is my understanding in Acumatica Labor Overhead is not calculated unless you apply a qty to an operation. It is also my understanding that this qty triggers a “move” (but not into inventory) operation which kicks off the Labor over head calculation. Which is fine in many cases however in some case you have long run assembly time where you might be on an operation for a long period of time. The pitfall here is you will not be able to track the labor dollars effectively until you post a qty complete to an operation (even if that operation may not be complete in reality).  Couldn’t this behavior just be a preference to allow the labor transaction to trigger the overhead? Even if the qty complete it posted as 0?  I hope that all makes sense. 

2 replies

Userlevel 2

Hi, that is possible if you choose the below overhead type. Overhead cost will be allocated based on labor hour or cost you have released in Labor transaction.

However, you need to ensure that the overhead cost you are trying to allocate are indeed driven by labor. In other words, labor should be the cost driver of the overhead.



Userlevel 1

We want to apply Labor By Cost. Meaning applying the cost depending on the cost of the labor applied to production order. (which is what is selected). 

The issue is the over head calculation will not apply to the operation until an actual qty is posted to the operation. So if you have an operation that takes 2 weeks to complete you have no idea where you fall in regards to overhead costing on that work order/operation. 

Here is an example from my test environment of what I am talking about. What we would expect is that in Cost Transaction 3 there would still be an overhead calculation but the overhead is tied to the qty even with “Labor By Cost” selected.



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