The Overhead Type field is usually found on the Other Charge for Purchase item type record. It is available for Landed Cost Type.
To help you understand, below is a description of the overhead types:
Amount/Base Unit – Use a fixed amount for each unit received. If you are using Amount/Base units, the Purchase Price field is the fixed amount that will be used to calculate the GL Impact.
% of Material – Overhead is a percentage of the material cost. If you use Percent of Material, the amount you put in the Purchase Price will be the rate and this rate will then be used to calculate the amount based on the Total Material Cost used in the Work Order.
% of Total – Overhead is a percentage of the total cost ( Materials + Other Overhead Costs). If a percentage of Total Price is used, the amount in the Purchase Price will be the rate used in calculating the amount based on the Total Material Cost and Other Overhead used in the Work Order.
The amount or rate that will be used for overhead is the amount you set in the Purchase Price field.