Overhead Cost

In PrismERP, Overhead Costs are closely associated with a BoM to capture all the indirect expenses required for manufacturing a product. While a BoM specifies the direct materials, components, and labor needed for production, overhead costs represent additional expenses that support the manufacturing process but are not directly tied to a single item. Examples include electricity, water, machine maintenance, labor overhead, factory rent, or other operational costs.

When creating or editing a BoM, users can assign Overhead Cost Heads to the BoM or to individual items, entering the relevant amounts for each. These overhead costs are automatically added to the total cost of the BoM, ensuring a complete and accurate calculation of production expenses.

Overhead costs defined in a BoM template are preloaded when creating a new BoM, which reduces manual data entry and maintains consistency across multiple BoMs. Similarly, when a Pre-Costing Simulation is generated from a BoM, all associated overhead costs are carried over automatically. This ensures that simulations reflect both direct and indirect production costs, helping users maintain accurate financial planning and cost tracking throughout the manufacturing process.

Add Overhead Cost

Field	Action
Head	Enter the descriptive name of the overhead cost head for easy identification.
Account Type	Select the type of account to which this overhead cost is linked (e.g., Expense, COGS).
Account	Select the specific account in the chart of accounts that will be used for this overhead cost.
Calculation Type	Choose the method used to calculate the overhead cost, such as Fixed, Percentage, or Per Unit.