In the existing set-up standard cost comprise of variable costs - material costs, direct labour, & machine cost. It will not include Fixed cost such as depreciation & interest on term loans. Neither will it include semi-variable cost on production salaries, & interest on working capital.


Any advise on how can we do the same....

Not sure I understood the question properly, but overheads are recovered in product cost just the same as direct labour -
Set up a new cost component (Cost Type = Operations Cost)
Assign it to the operation via the operation rate code $/ht or whatever.
This is a variable i.e. overhead total depends on processing time etc - you could also consider using surcharges if you wanted to assign $ per unit.