Overview

For all process groups, direct and indirect overhead contribute to fully burdened part cost.

Direct overhead accounts for machine depreciation, machine maintenance, and energy to power machines. In addition, users have the option of including facilities cost (rent, insurance, and utilities) in direct overhead (by default, it is included in indirect overhead).

Indirect overhead accounts for support services for quality, maintenance, planning & purchasing, manufacturing engineering (CNC programming and process planning), and tool crib. By default, indirect overhead also includes facility costs (rent, insurance, and utilities), but users have the option of moving facilities cost to direct overhead (see Annual Direct Overhead).

Direct overhead is included in Total Variable Costs for a part. (Total Variable Costs are shown in the Cost Summary tab, and specified by the CSL formula Piece Cost.)

Total Variable Costs = Material Cost + Labor Cost +

Direct Overhead Cost per Part + Logistics Cost + Setup Cost per Part + Other Direct Costs

The fully burdened part cost is the sum of total variable costs, indirect overhead, and other costs:

Fully Burdened Cost per Part = Total Variable Costs +

Indirect Overhead Cost per Part + SG&A + Margin + Fixed Costs

The calculation of per part overhead is introduced in Overhead Costs per Part.

This chapter contains the following subsections:

 VPE Variables, Machine Properties, and Overhead Costs

 Displaying and Overriding Overhead Values

 Overhead Costs per Part

 Overhead Rates

 Annual Direct Overhead

 Annual Indirect Overhead

 Overhead Formula Reference