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Activity Price Caculation

Hi Experts

First of all I tell you that I am a user and not consultant. So request you to please help me with the T codes and also if possible describe the process also.

I have seen S_ALR_87013611 report for some of the cost centers where activity values are coming into the credit side in both columns Plan and Actual. Why it is so as to my understanding we do expenses on activities so it should come in the debits. Kindly help.

Thanks

Amritraj

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  • Best Answer
    Posted on Jan 08, 2014 at 11:48 AM

    Deat Amritraj


    As you have requested something in your first line I also have to request you that before posting query Please check the forum thoroughly.


    Secondly Your heading is saying something else and content is saying something else. However what I understood is that you want to understand the process so I am trying to give you some idea on this. However I myself has given this detail at least 2-3 time.


    In the month beginning after planning when you calculate planned activity prices through KSPI (Input planning KP06 and Output planning KP26), System arrives at the price using formula KP06/KP26. And at this time Credits the values in the cost centers (credits side plan column) which are calculated by the formula (Plan Activty Price x Activity Qty planned), so normally planning (debits) is matched with Credits.


    Now the normal transaction starts in the month. Expenses debited in FI are posted on the debited (Actual Costcolumn) in the cost center (assuming in the same cost elements as you have planned). Manufacturing orders are being confirmed by PP folks. The Activity confirmation done on orders are credited in the Cost center in actual column. But remember as uptill now system is working without actual activity prices so the credits are coming with the planned price only (planned activity price x actual activity quantity confirmed)


    During the month end process you must be calculating actual activity prices (KSII). After this step when you do revaluation of orders using this price at this time system credits the Cost with new value arrived by actual price x actual activity) and passes entry for this revaluation in the controlling only.

    Hope the above is sufficient to make you understand the process. Feel free to ask further if required.

    Regards

    Rajneesh Saxena

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    • Former Member Rajneesh Saxena

      Hi Rajneesh

      I have checked and found that you are right. I have not defined any splitting so the system is dividing the planned values (independent) in equal proportions to the activities assigned in cost center through KP26.

      Thank you all experts for making me understand the process.

      Thanks

      Amritraj

  • Posted on Jan 08, 2014 at 11:31 AM

    Hi Amrit

    When you incur expenses, they are shown on Debit side.. (I.e. when you book expense frm FB60)

    When you confirm activities, it means you are absorbing the expenses into product.. Hence, the CC is Credited and Product is debited...

    Hope the above explanation using accounting language helps you

    br, Ajay M

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  • author's profile photo Former Member
    Former Member
    Posted on Jan 08, 2014 at 12:19 PM

    Hi Amrit

    In simply layman terminology, Cost Center is the provider of services (via activity Types). As cost center is provider of service, it will charge costs to the respective recipients and therefore you will see Credits at Cost Center level and Debit will go to the respective recipients.

    Debit side (Cost Center) is ideally for period costs (salary, electricity etc etc) that are orginially posted to the Cost Center and then reallocated to respective recipients (as above) through Credits. As a efficient controller, one should see full absorption with zero / minimal over / under absorption.

    Hope it helps

    Regards

    Mustafa Sakerwala

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  • author's profile photo Former Member
    Former Member
    Posted on Jan 08, 2014 at 11:26 AM

    Hi Amrit Raj,

    It is the right behavior of SAP.

    When you do the confirmation of activities, system posts entry like below..

    Dr Production/process order

    Cr Cost center

    That's why you find the values against activities as credit (- sign).

    Please ask if you have any further doubts...

    Regards..

    Jose

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  • author's profile photo Former Member
    Former Member
    Posted on Jan 09, 2014 at 05:11 AM

    Hi..

    A cost center produce the activities using the expense and the activities are used by other cost centers, orders, processes, and so on.

    The expense which is used to produce the activities are posted to cost center's debt.

    The activities which are transferred from a cost center to other cost objects are posted to a cost center’s credit.

    The activities which are received by other cost centers, orders, processes, and so on are posted to
    theirs credit.

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  • Posted on Jan 09, 2014 at 05:24 AM

    Hi,

    In very simple terms, you spent INR100 on a particular work in a period. That will be created in FI entry and will be transfer to CO. So, here, it will show INR100 in the debit side of your cost center. Out of INR100, if you utilize INR80 in the production process (here, convert these INR80 into activity) and remaining INR20 on marketing activity.

    In the above process, your cost center will be look like this

    Dr. side INR 100 (which comes from FI entry)

    Cr. sdie INR 80 (when you convert your expenditure into a particular activity to produce)

    Under absored INR 20 (This amount can be transferred to COPA to adjust for exact profitability)

    BR, Srinivas Salpala

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