Please reply the following simple questions

[Former Member]

Hi

gurus

Please reply the following simple questions

1. What is the difference between primary cost element and Second cost element

where we can use primary Cost element and Where we can use second cost element.

2. What is the difference betwen dummy profit center and profit center, where can we use dummy profit center and where we can use profit center, what is the use of dummy profit center.

3. what is distribution and assesment what is the difference.

i will giveyou full points.

Thank you early reply.

Regards

Anil

[Former Member]

1. primary costs elements are images of G/L accounts in controlling, These get updated when there are postings to corresponding g/l accounts. Secondary cpst elements are used within controlling to carry costs between cost objects.

2. Usally all the transaction that needs to be posted to PCA will have some profit center associated wit it. If some reason there is no profict cneter assigned to any postings it will post tp dummy profit cneter. The minimum no. of entries in dummy PC is a good stand.

3.Distribution takes place between primary cost elements where as assessment is used to post the costs using secondary cost elements.

Assign points of helpful

[Former Member]

hi Anil,

1. Primary cost element is an element which transport the values from financial module t controlling module. When you post a transaction in FI, if the cost element is assigned automatically the values will update in cost centers also.

Secondary cost element transports the values with in the controllign area like one cost center to another cost center

3. Assessment and distribution

Assessment and distribution are used for overhead allocation. We need to allocate overheads to different cost objects.

Overheads are indirect expenses and cannot allocate directly to particular cost center or product etc. We need to distribute those expenses based on the activity or hours or some other base.

All the overheads are first distributed to relevant cost centers... this is called as primary distribution ... it is called as distribution in SAP

Some times the overheads expenses of some cost centers need to be distributed again to remaining cost centers... this is called as secondary distribution ... it is called as assessment in SAP

E.g. : First overheads are distributed to all production cost centers and service cost centers. This is called as distribution (Primary distribution). That service centers cost should be charged to production cost centers, so the cost of service centers are again distributed to production centers. This is called as assessment (secondary distribution). This secondary distribution is needed to recover the costs of service centers from the production centers which earn revenue.

Distribution - Steps

1) Create a Statistical figure (KK01)

2) Enter values to statistical figures (KP31)

3) Create No. ranges (KANK --> GROUPS --> RKIV)

4) Create Actual Distribution Cycle (KSV1)

5) Execute the cycle (KSV5)

Assessment - Steps

1) Create a Statistical figure (KK01)

2) Enter values to statistical figures (KP31)

3) Create No. ranges (KANK --> GROUPS -->RKIU)

4) Create Actual Distribution Cycle (KSU1)

5) Execute the cycle (KSU5)

3 Differences between Assessment & Distribution:-

a. Performance of System - Assessment takes lesser time.

b. Visibility of Sender - In assessment, visibility is lost.

c. Primary Cost Elements - Distribution is used only for Primary Cost Elements, whereas Assessment is used for Primary & Secondary Cost elements.

Activity Types & Statistical Key Figures can be related to as base in Assessment/Distribution between senders and receivers.

The Basic difference between an Assessment and Distribution is:

1.Assessment is done for Secondary Cost elements and Distribution is done for Primary Cost elements.

2.When you do a Assessment it creates a seperate Line Item, where as Distribution does not create a seperate Line Item. For Exp: when a Cost say salaries is transferred from X to y,when doing an Assessment, it creates a seperate Line Item in the salaries a/c of Y clearly showing the amount transferred from X, but in case of distribution, it just merges the expenses.

3.KSV5 is used for Cost Center Distribution and KSU5 for Assessment Cycle. 4KE2 is for Distribution Cycle for Profit Center and 3KE1 is for Assessment Cycle.

Hope this will give you a clear picture.

http://help.sap.com/saphelp_erp2005vp/helpdata/en/4c/dca9ed1c6611d2a5ad0000e839d005/frameset.htm

2.

ranjit

[Former Member]

1. What is the difference between primary cost element and Second cost element

where we can use primary Cost element and Where we can use second cost element.

Overheads are indirect expenses and cannot allocate directly to particular cost center or product etc. We need to distribute those expenses based on the activity or hours or some other base.

All the overheads are first distributed to relevant cost centers .. this is called as primary distribution ... it is called as distribution in SAP

Some times the overheads expenses of some cost centers need to be distributed again to remaining cost centers... this is called as secondary distribution ... it is called as assessment in SAP

Eg : First overheads are distributed to all production cost centers and service cost centers. This is called as distribution (Primary distribution). That service centers cost should be charged to production cost centers, so the cost of service centers are again distributed to production centers. This is called as assessement (secondary distribution). This secondary distribution is needed to recover the costs of service centers from the production centers which earn revenue.

2. What is the difference betwen dummy profit center and profit center, where can we use dummy profit center and where we can use profit center, what is the use of dummy profit center.

Profit center may be a location or a product or a dept. You can prepare financial statements as profit center wise also. But all accounts may not be relevant for profit center. So any transaction which is not relevant to profit center is posted in dummy profit center.

3. what is distribution and assesment what is the difference.

Distribution is used for allocating primary cost elements to cost objects

Assessement is used for allocating secondary cost elements to cost objects

Radha

[Former Member]

Dear Sir,

1st question

Primary cost element is an element which transport the values from financial module t controlling module. When you post a transaction in FI, if the cost element is assigned automatically the values will update in cost centers also.

Secondary cost element transports the values with in the controllign area like one cost center to another cost center like.

2nd question:

Dummy profit center is most important in profit center accoutning. the relation ship between controlling area to dummy profit center is 1:1. When you are maintaining the profit center accoutning you need to create the dummy profit center which is a mandatory. When ever you post any transaction if you do not assign profit center at the time of posting, all these type of transactions goes to dummy profit center and later you need to rectfy this. this is the use of dummy profit center.

3rd question:

Distribution is to apportion the costs among the cost centers by usign the primary cost element. Here you will know the origin of the values.

Assessment is to apportion the cost among the cost centers by using the secondary cost elements but here you will not know the origin of the costs.

REgards

Harikishan