This overhead can include different types of overhead that are related to routing information about operations resources, or information about setup time and run time.

It can act as the basis for calculating various types of manufacturing overhead in the costing sheet setup.

It can segment costs for different types of overhead, such as labor-related and machine-related overhead, based on cost groups that are assigned to indirect costs in the costing sheet setup.

It can segment costs for setup time and run time in routing operations, based on the cost groups that are assigned to cost categories that are related to the routing operations.

It can segment costs for different types of operations resources, such as different types of labor or machines, based on the cost groups that are assigned to cost categories that are related to operations resources and routing operations.

It can segment costs for different types of material, such as ingredients and packaging material for a canned goods product, based on the cost groups that are assigned to items.

Cost group segmentation can serve several purposes.

Cost group segmentation has several synonyms within manufacturing environments, such as cost breakdown, cost decomposition, or cost classification.Ĭost group segmentation has several synonyms within manufacturing environments, such as cost breakdown, cost decomposition, or cost classification. Cost groups provide the basis for segmenting and analyzing cost contributions in a manufactured item’s calculated cost, such as the cost contributions for material, labor, and overhead.

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