What is quantity-based overhead rate in SAP CO - Controlling?

SAP Term: quantity-based overhead rate

• Component: CO

• Component Name: Controlling

• Description: Overhead rate that is calculated per unit of measure for a cost element, for example EUR 100 per unit.

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• Key Concepts: 
  Quantity-based overhead rate is a method used in SAP Controlling (CO) to calculate overhead costs. It is based on the quantity of a product or service produced, and is used to allocate overhead costs to the cost objects that are associated with the production. This method is used to ensure that overhead costs are accurately allocated to the cost objects that are associated with the production. 
  
  How to use it: 
  In order to use the quantity-based overhead rate, you must first define an overhead rate for each cost object. This rate is then applied to the quantity of the product or service produced in order to calculate the total overhead cost for that cost object. The total overhead cost is then allocated to the cost object based on the quantity of the product or service produced. 
  
  Tips & Tricks: 
  When calculating the quantity-based overhead rate, it is important to ensure that all costs associated with production are taken into account. This includes direct labor costs, materials costs, and any other costs associated with production. Additionally, it is important to ensure that the overhead rate is updated regularly in order to ensure accuracy. 
  
  Related Information: 
  The quantity-based overhead rate is one of several methods used in SAP Controlling (CO) for allocating overhead costs. Other methods include activity-based costing and time-based costing. Additionally, SAP Controlling (CO) also provides tools for analyzing and reporting on overhead costs.