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Former Member
Jun 11, 2009 at 10:08 AM

Allocation of Expenses to a product

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Hello,

I am stuck with the following situation :

Cost Center Accounting on Co Code level

Profit Center Accounting on on Group level in order to provide an overview of the results of combined companies.

1. Cycles : First I intend to allocate Facilities and Payroll to the receivers (departments) based on m² and headcount. Then IT will allocate services to all departments involved. Some allocations will be distributed to all users (PC's), other expenses will have to be allicated more specifically, depending on the applications used in each department.

As soon as departments have allocated internal services to each other, the total cost of each department will be allocated to products or product families. Departments involved in the management of these products will use their own keys (eg call center number of calls per product), while Support Departments such as accounting will rather distribute based on income or margin.

Issue: most of the support departements may generate expenses for a specific product (range). Some examples are lsited below.

Examples:

1.The customer decides to launch a new product that requires minor development on the back-office application . Inhouse development is to be allocated to the back-office (cost center) but should not be distributed, by the back-office, over all products .

2. SAP ECC6 project will go into capital expenditure and thus the depreciations need to be allocated to Finance

Challenges:

- create a model where specific costs are allocated to the respective products, before the bulk of all other expenses is distributed over all products

- ensure that intra-department allocations (preceeding the final product allocations above) are performed accurately = prevent that above mentioned specific costs are mixed with the bulk

- allow the customer to compare budget and actuals with the same structure (gross expenses - allocated expenses = net)

Hope I have explained well .

Any guidance or suggestions will be apprecited .

Kind Regards,

P:S : The Product Costing module is not in place. There is no SD/MM module either.

Edited by: Sanjay Mukhopadhyay on Jun 11, 2009 12:10 PM