Allocation Basis for Different Resources in Oracle ERP Systems

Allocation of overheads is always in arguments. It differs from company to company. However, the allocation Basis for different resources in Oracle ERP Systems is shown here as examples.

 

Resource Class	Resource	Cost Component Class	Allocation Basis	Comments
Direct Labor	Labor	Direct Labor	Labor Hrs	–
Labor Overhead	Labor Overhead	Labor Overhead	Labor Hrs	–
Costing Resource	Granulation Costing Resource	Granulation Cost	Machine Hrs	The overheads related to Granulation will be captured based on the ‘Department’ segment in the COA
QAD	QAD	Quality Overhead	Machine Hrs	QAD cost can also be allocated on the basis of Quality hours.
Warehouse Overhead	Warehouse Overhead Resource	Warehouse Overhead	Machine Hrs	The allocation of Warehouse overhead to the product cost will be on the basis of the machine hours
GPO (General Plant Overhead)	GPO Resource	GPO	Machine Hrs	The allocation of Warehouse overhead to the product cost will be on the basis of the machine hours