In this step you can create origin groups. These groups further subdivide the material costs so that the calculation bases for overhead calculation can be defined by origin group.
By means of account determination , each material is assigned to a G/L account and therefore also to a primary cost element. If this assignment is too inexact for your overhead calculation purposes, you can define origin groups for particular material components and enter them in the costing views of the relevant material master records.
Suppose you want to allocate overhead to the material costs in one way and to the materials produced in-house in another way, but you want to update the costs for both materials under the same cost element.
You define two origin groups. For externally procured materials, enter the origin group EXTL in the costing view. For materials produced in-house, enter the origin group INHS in the costing view.
You define two calculation bases for the same cost element interval. In the first, enter the origin group EXTL , and in the second the origin group INHS. You must then define different overhead rates that refer to these two calculation bases in the corresponding costing sheet.
You must already have completely created a controlling area.