I guess your question is to check if there is a mechanism to auto calculate the

overhead rate in the system....

Sorry, there is no such mechanism.. You need to manually calculate and maintain it
in KZM2 or KZZ2... Then revaluate the prod orders with new rate using CO43....

However, I find it painful and boring.. Hence, I have developed a workaround which
I prefer to use always...

You need to decide on what basis you would like to absorb your overhead... Say,
Machine hrs, lab Hrs or Output.... Lets assume you choose Output (KG) to absorb the
overhead

1. You need to create an Activity Type called PRDOVH and assign it in the PP Work
center... Assign the cost element of this act type to a separate cost component in
OKTZ

2. While creating the Routing, the Activity Qty = Operation Qty for this Act
Type... i.e. If you are creating routing for 100 Units, specify the Act Qty for
PRDOVH as 100...

3. The Formula in the work center will be fully variable for this Act Type.. i.e.
the Act Qty should change in proportion to the Qty Confirmed....

4. The PP Guys will confirm the operation in PP... This Act Type will also get
confirmed along with it

5. Now calculate Act Price KSII as usual and run revaluation... From this point
onwards, follow the normla procedure which you follow in month end