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# PRODUCTION ORDER MAINTENANCE

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Hello, i set up an OVHD ID, “payroll” type as variable by labor cost.. factor =”1”

and my labor cost per hour is \$15 in BOM.

on the testing production ticket:

2 labor trans.. one last for 1 hour labor cost =\$15 ( correct) , but “payroll” ovhd = \$4.5 ( expected \$15)

2nd labor last for around 1 min.. and labor cost = \$.25 ( correct) , but  “payroll” ovhd cost =\$.08(expected \$.25)

can someone shed some light please?

thank you

Zoey

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Best answer by andrestamour43 9 November 2021, 19:42

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Zoey,

Look at the cost rate of the Overhead ID “Payroll” if the cost rate is \$0.30 then that would result in both the \$4.50 and the \$0.08 result. See below.

Overhead variable by labor cost = Labor Cost x Overhead Cost Rate per \$ x Overhead Factor

First Scenario \$4.50 = \$15 x \$0.30  x 1.00

Second Scenario \$.08 = \$0.25 x \$0.30 x 1.00

Hope this helps!

-Andre

Userlevel 1

Thank you!

Zoey

Userlevel 1

@andrestamour43  hi Andre,

just got a chance to take a look! yes! cost rate was set up at .30

Thank you so much, i am trying to exploring into it and see if this is a good erp for us by using the preloaded data.

Zoey