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|