If a Cost Accounting Journal record’s Posting Code is eligible for overhead, the Overhead Rate process then reads the Eligible for Overhead flag for all journal records that have the pre-selected eligible Posting Code. The Major Program’s overhead subsection determines when a journal entry should have overhead rates applied. It is defined for each Major Program within a department. The Overhead Eligible flag determines overhead rate application eligibility. Those Major Programs that are marked as Eligible for Overhead are required to have an Overhead Default Percentage Rate defined on the overhead subsection. This rate is the rate to be applied to the posting amount of selected Cost Accounting Journal records if no applicable rate is available on the Overhead Rate Exception table. The process will always look for an exception rate on the Overhead Rate Exception table before applying the Major Program default rate.
There is another flag on the Major Program table that may be employed by the Overhead Rate Process. The Overhead Redirection flag allows users to charge overhead rates to different Chart of Accounts elements and code combinations than those selected from the input journal entries. When overhead transactions for redirected lines are generated, there are three possible scenarios that can be encountered:
Chart of Accounts elements left empty on this panel do not change from the value on the input ledger record to the value on the Overhead transaction.
Chart of Accounts elements that have a code entered on this panel replace the journal entry’s Chart of Accounts code with spaces.
Chart of Accounts elements with a value of BLNK will replace the journal entry’s Chart of Accounts code with spaces.
The Overhead Redirection flag, found on the Major Program’s overhead subsection, allows all charges to a particular Major Program to be recorded into a single account such as Activity code. There is a limit of one redirection record per Major Program.