I have developed a new overhead rate tied to direct labor hours. This new rate works well for manufactured product, however, we also have purchased finished good products that we would like to burden as well. Obviously direct labor does not provide much help as a cost driver in this case as there is essentially none tied to these products.
I’m wondering if anyone else on here burdens purchased products, and if so, how have you approached it? For now management wants to keep the cost driver simple at just direct labor rather than trying to implement something such as an ABC cost system.
Distribute indirect cost in receipt entry- I think you need the landed cost module to do it. We use it for freight but I’m pretty sure you can put whatever you want in there.
Thanks Alisa, that is what it seemed like in my research. We plan to use the landed cost module for freight as well, but also want to include certain burden costs for purchased products in a similar manner that we burden manufactured products. It seems like there is a way to include misc charges on shipments, and this is where we could implement the indirect cost. Are you familiar with using the misc charge side of the landed cost module?
Thanks Bruce, in this case I’m not sure we would be able to use the Mtl Burden Rate %, as in my research it looked like this is incompatible with the landed cost module which we plan to implement in the near future. From what I had read you can’t have a Mtl Burden % on a part and also use the landed cost module for the same part, but I could be mistaken. Am I mistaken on that?
