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Former Member

Planned Network Activity Labor Cost question

Planned Labor Costs question

To plan labor costs we do the following but it is cumbersome and time consuming is there another more efficient way of handling this process?

We create a project structure with associated network header and activities.

For a given network activity we enter total planned labor hours expected for the duration of the project (project crosses multiple fiscal years)

Here is the scenario:

Fiscal year 1:

“Original” Activity planned with 120 hours at rate of $10/hour. For a total plan of $1200.

During fiscal year 1 we consumed 20 hours for a balance remaining of 100 used hours.

Fiscal year 2:

Labor rate changes from $10 to $20/hour with 100 hours available.

Here is the current way we handle this.

Original Activity remains on network with 100 hours consumed at $10/hour

We create new activity and maintain 100 hours with a new labor rate of $20/hour.

Is there an alternative method instead of having to create duplicate activities?

Many thanks to all.

Please see attached diagram

Diagram.jpg (94.3 kB)
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5 Answers

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    Former Member
    Oct 13, 2014 at 03:54 PM

    hi Toliver,

    In SAP labor rates are maintained with Cost Center and Activity type combination. Transaction code is KP26, here we maintain the per hour rate.

    Based on the planned hours and actuals on the NWA, the hours multiply with rate in KP26 (provided its the same work center and activity type combination).

    in your case you dont have to add another activity for the remaining 100 hrs, if you update the per hour rate under KP26 you will get actual cost based on the new rate.

    this activity of updating KP26 is done by the finance team with the help of HR.

    hope this helps your query.

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    Former Member
    Oct 13, 2014 at 09:18 PM

    Hi Toliver,

    You dont ned to maintain duplicate activities in order to achieve your requirement. Just get in touch with your FICO consultants and ask them to maintain the labor rates in KP26 for each Fiscal Year.

    Once you have done that, every time you save your project, system automatically determines the costs based on the rates you have maintained in KP26. This is a standard SAP functionality and i am sure your Finance team would be aware of that.

    Best Regards,

    Gokul

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    • Former Member Paulo Vitoriano

      Hi Paulo,

      If i understood the requirement correctly, rate is a primary concern that Toliver has.

      @Toliver - Correct me if i am wrong.

      Regards,

      Gokul

  • Oct 14, 2014 at 07:13 AM

    Hi Toliver

    Its not  required to create separate activity even if your rate will get changed.

    1. Create Activity (CN21) With Work Qty e.g. 150 Hr

    2. Create Activity Type (KP26) of current Rate e.g..  $10 / Hr

    3. make actual confirmation of the Qty (CN25) e.g.. 100 hr

    4. Actual cost for Current year = 100 hr X $10/hr = $1000

    Now FY changed & Remaining Hrs are 50

    5. Amend the rate in same Activity type (KP26) e.g. $15

    6. make actual confirmation of remaining hrs (CN25)

    Now Your actual hrs cost will be captured with respect of new rates

    7. Actual cost (This year) = 50 hr X $15 = $ 750

    8. Your actual cost of total 150 hrs = $1000 + $750 = $1750

    Hope this will help you.

    Regards,

    Dnyanesh

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  • Oct 14, 2014 at 12:36 PM

    It seems you are duplicating the activity to revise the plan cost as change in KP26 will reflect only during actual confirmation.

    Please try by running CJ9K after updating KP26 to see whether plan cost updates automatically.

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    Former Member
    Nov 05, 2014 at 02:12 PM

    Many thanks to all those who replied. Grateful for your assistance and time!😀

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