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Overhead Cost

Overhead Cost refers to indirect expenses incurred during production that cannot be directly attributed to a specific product or raw material. In PrismERP, the Overhead Cost module helps allocate these indirect costs—such as utilities, rent, depreciation, and administrative expenses—to production orders, enabling accurate product costing and profitability analysis.

Key Features​

  • Define Multiple Overhead Cost Types Categorize costs like utilities, maintenance, labor indirects, etc.

  • Allocation Methods Distribute overhead costs based on production volume, machine hours, labor hours, or fixed percentages.

  • Period-wise Setup Manage overhead costs on monthly, quarterly, or yearly basis.

  • Integration with Production & Costing Modules Automatically applies overhead during cost calculations.

  • Reporting & Analysis Generate detailed overhead cost reports by cost center, product line, or time period.

  • Adjustments & Revisions Update overhead allocations as operational conditions change.

Usage Guide in PrismERP​

Access Overhead Cost Module​

Navigate to Overhead Cost Setup

Define Overhead Cost Types​

  • Click “Add New”
  • Enter:
    • Name (e.g., Electricity, Rent)
    • Select Cost Center or Department
    • Set Allocation Basis (e.g., machine hours, labor hours, fixed amount)

Enter Overhead Amounts​

  • Input monthly or periodic overhead costs
  • Define effective date range

Configure Allocation Rules​

  • Choose allocation formula or percentage per product or work center
  • Link overhead to production jobs or departments

Save & Apply​

  • Save overhead configurations
  • Overhead costs will be factored automatically during production costing and reporting

Reporting & Review​

  • Generate overhead cost reports to analyze cost distribution
  • Review periodically to adjust rates and improve accuracy