Activity Allocation

[Former Member]

HI

Tell me about Activity Allocation.

Regards

Shammi

[Former Member]

Hi,

Activity Allocation is for allocation of relevant costs of a particular activity (like Machine, labour, maintenace, etc.)

For allocation activity costs, we need to define activity type in KL01 by specifying the unit of measurement of the particular activity type (like in case of machine - Hours etc.). While creating activity type, we will assign a secondary cost element (with category 43) in the activity type through which the activity cost will flow.

After that we will plan for cost center in KP06 (cost elementwise). Then we will plan machine hours in KP26 where we will link the activity type to a particular cost center.

When we do price calculation in KSPI, system checks the planned costs for cost center (in KP06) and also checks the machine hours planned (in KP26) and gives the cost for the particular activity type.

Please check the above in the system - you will get an idea. If you require any help, please revert back.

Regards,

Srinivas

[Former Member]

hi,

Activity types are units of measurement for the internal allocation of costs from within CO. Activity types define the main cost drivers or services performed by a cost center. Examples include direct labor hours, machine hours and maintenance hours. Activity types are used to derive the activity price. The total costs are divided by the total planned or actual activity quantity to derive the activity price (cost / activity type unit). Direct Internal Activity Allocation is the process of recording activities performed by a cost center and simultaneously allocating those activities to receiving cost centers based on consumption. In the case of direct activity allocation, the sender (output), and the receiver (consumption) activity volumes are known.

Indirect activity allocation is the process of allocating activities from a sender to a receiver cost object. The activities allocated to the receiver are multiplied by the planned activity price to determine the total amount.

There are two types of indirect activity allocations:

• Sender activities known

The activity type is allocated from the sender to the receiver based on receiver tracing factors (i.e. actual receiver statistical key figures, planned receiver activity types, etc.)

This type of indirect activity allocation must be set up with an activity type of Category 3. This category is defined for manual entry (of known sender values), using indirect allocation (tracing factors).

• Sender activities unknown

Activities are inversely allocated from the sender cost center using receiver tracing factors or fixed amounts/percentages.

This type of indirect activity allocation must be set up with an activity type of category 2. This category is defined for inverse determination (of sender values based on receiver consumption) using automatic allocation (to receivers).

go through this u can clear ur doubts,

regards

[Former Member]

can any body tell me about the Activity Allocation. how it will flow to cost of production.

Regards

Shammi