Factory Overhead Question

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Posted on by Joe PencilPusher

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Since the DC offers a choice of indirect labor but does not Post (in GP10SP5), it’s information only, how are companies adding indirect labor? I was thinking of using indirect labor to add the employer’s share of payroll burden (social security, medicare, etc.) to WIP. Since SS is taxed only on a certain percentage (6.2% on the first 113K) you can’t really add it as a variable overhead percentage in the labor card, that’s not scalable and may not work for all employees.

Maybe setup a machine as OH with an hourly rate calculated out to be the total OH rate per hour and use that as the last router step but that would blend this OH machine in with all machine time so when viewing the variance screen you couldn’t tell if real machine time was unfavorable or not.

Any guidance would be appreciated.

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