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Small and medium business | Business Central, N...
Answered

Indirect Overhead Cost Loading on Sales Transaction and Impact Profitability

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Posted on by 15,835 Super User 2026 Season 1
As the project manager for the implementation of Business Central into a client's organization.
 
In the business Central production module I have defined the direct cost of the particular release production order and the cost is rupees 300 and there are some indirect cost like electricity expense, labour expense, water expense, which are accrued but not billed because of the bill is received in the next month so I need to update the indirect cost in the my costing of the release production order and respect you that release production order items must be sold as well and I need to update the costing of the sold items as well and update the profitability of the same.
 
For example in the example my cost is rupees 300 so my selling price is rupees 500 so the difference of my profit is of 200 but there is over it cost of rupees 50 additional and need to update in the release production order as well as in the related sales order so the profit ability should be reduce from 200 to 150 so how can I do this in the business centre in the production model in the costing segment.
 
We already through about the revaluation journal but it is not working on released production order because my production cycle is 60 days. So, there are many released production orders on which I need to load the cost. Provide me solution for this in business central.

I do not want add percentage on work center indirect cost. Suggest me some other way around. Even you may suggest customization if it achieves the objective.
I have the same question (0)
  • Suggested answer
    AndrewThomas81 Profile Picture
    614 on at
    You can assign an overhead rate into the replenishment section on the item card which will generate overhead recovery per item.
     
  • Jainam M. Kothari Profile Picture
    15,835 Super User 2026 Season 1 on at
    Hello Andrew Thomas,
     
    No i cannot use that "Overhead Rate" Field because my Production Cycle is 60 days and User don't have the knowledge of Per Unit Overhead Cost. He is doing total cost divide into the Production Order Qty. and it may be vary in each month.
     
    Currently they are doing in Excel working.
  • Suggested answer
    OussamaSabbouh Profile Picture
    14,541 Super User 2026 Season 1 on at
    Hello,
    Business Central calculates production costs from material, capacity (labor), subcontracting, and overhead, and the final cost normally updates when the production order is Finished and Adjust Cost – Item Entries is run. Since your production orders stay Released for long periods (60 days) and you need to load additional indirect costs like electricity or labor that are billed later, the practical approach is to post those indirect costs directly to the production order using the Production/Consumption Journal with a cost item, resource, or dummy overhead line instead of using Work Center indirect %. This adds the cost to WIP and increases the item cost of the output; once you run Adjust Cost – Item Entries, the updated cost flows to Item Ledger/Value Entries, which automatically updates COGS and profitability for the related sales transactions. If the overhead (e.g., ₹50) must be distributed across many open production orders, a small customization/batch process can allocate and post that cost automatically to released production orders based on quantity, capacity hours, or output value.

    Regards,
  • Verified answer
    Jainam M. Kothari Profile Picture
    15,835 Super User 2026 Season 1 on at
    Hello Experts,
     
    We have found Our Customized solution on the same.
     
    Thank you for the help.
  • Suggested answer
    YUN ZHU Profile Picture
    99,978 Super User 2026 Season 1 on at

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