Basic Settings for Costing Materials

Here you make general settings for cost estimates with and without quantity structure:

In this step you can specify how materials that are assigned to the same cost element are controlled separately for the purposes of overhead allocation. This allows you to apply overhead to direct costs by cost element and origin rather than only by cost element.
In this step you create overhead groups for each valuation area and assign these groups to overhead keys. You can differentiate overhead rates according to the materials to which overhead is to be allocated by entering an overhead group in the material master record of the product being manufactured and specifying the overhead key in the costing sheet.
In this step you can use Activity-Based Costing to allocate overhead as an alternative to the conventional method.
In this step you define the
cost component structure and the cost components.
In this step you can check the Customizing settings by specifying a costing variant.