A manufacturing environment with only bills of material information (and without routing information) can calculate manufacturing overheads that are based on material. The manufacturing overheads are expressed as indirect cost calculation formulas for a surcharge percentage, and they are defined in the Costing sheet setupform. A cost group that is assigned to material components acts as the basis for a calculation formula. The calculation formulas can be defined for individual products or for item groups that are assigned to products, thereby providing greater flexibility in calculating manufacturing overheads that are based on material.