Activity Types

[Former Member]

Hi,

Currently we are doing configurations in Controlling.

1. What is the importance of activity types?

2. Is this functionality mandatory?

Thank you very much for your reply.

[Former Member]

Hi Benjie

Activity types defines the kind of action performed while producing the product. Defining activity type is particularly important when product costing is implemented.

A cost center has activity types. A cost center can be a plant or you can say working place and in working place a lot of activity goes on like labour, Machine activity, maintenance activity

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Regards

KM Naidu

[Former Member]

Hello!

Thank you for sharing your knowledge.

Correct me if am wrong, this is only applicable to a manufacturing business? What about real estate business? Is it advisable to set an activity type in developing a subdivision? model house? etc..

[Former Member]

Hi

The same is also true for real estate as well.. you will have activity based costing say for fabrication of concrete blocks..

Regards

Sanil Bhandari

[Former Member]

Hello

Activity types classify the activities produced in the cost centers within a controlling area.

To plan and allocate the activities, the system records quantities that are measured in activity units. Activity quantities are valuated using a price (allocation price).

In Overhead Cost Controlling, costs based on the activity quantity of an activity type are posted separately in fixed and variable portions. When you divide the activities of a cost center into activity types, you should consider whether the costs can be allocated effectively to the activity types.

The prices of the activity types of a cost center can be either entered manually, or calculated by the system based on the costs allocated to the activities. Prices can be calculated either using plan costs or actual costs.

You can plan, allocate, and control costs either at the activity type level of a cost center, or at the cost center level. You can enter actual costs at the cost center level. Costs entered at the cost center level are assigned using splitting.

You can also assign the activity type of a cost center directly. This use was designed for certain application areas (such as personnel costs and depreciation postings).

When the activities produced by a cost center are used by other cost centers, orders, processes, and so on, this means that the resources of the sending cost center are being used by the other objects.

When the activities produced by a cost center are used by other cost centers, orders, processes, and so on, this means that the resources of the sending cost center are being used by the other objects.

Typical examples of activity types for cost centers are machine hours, administrator hours, CPU minutes or units produced.

Reg

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