To solve this, departmental overhead rates and activity-based costing can be used In job-order costing, departmental overhead rates and activity-based costing affect only the application of overhead Activity cost is applied to each job by multiplying the activity rate by the job's use of the associated driver

Mar 23, 2017 · The overhead rate determines to what extent the percentage-based or quantity-based overhead rate should be applied to the direct costs. It also specifies under which dependencies the overhead rate is to be applied (standard dependencies: overhead key, controlling area, company code, plant, business area, order type, order category, profit center). To maintain quantity-based overhead rates in the productive system, go to Transaction S_ALR_87008180 or follow the menu path, Accounting > Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by Period > Period-End Closing > Current Settings > S_ALR87008180 – Define Quantity-Based Overhead Rate. IMG ( Controlling ( Product Cost Controlling ( Product Cost Planning ( Basic Settings for Material Costing ( Overhead ( Costing Sheet: Components ( Define Quantity-Based Overhead Rates. In addition to percentage-based overhead rates, you can also define quantity-based overhead rates, for example, 100 INR per tonne).