Automatic rate calculation for Variable Cost

[Former Member]

Hi Experts:

We have some cost centers where we have planned some cost elements depending of the activity type. They are variable cost.

On the other hand, we have planned activy plan and capacity.

Now, we need to calculate our activity rate by using the capacity, not the activity plan. We need it because, even though they are variable cost we have subactivity planned in order to ensure that we can meet if the level the production raise (for example, we have hired more labour that our activity plan says.

If we plan this cost as fix to calculate rates according to capacity, system will not be able to calculate theoretical cost to adapt cost plan to the level of occupation.

On the other hand, if I plan this cost as variable, system (even thouhg I indicate that this activity is calculated according to the capacity (type '2'), system calculates variable cost according to the activity plan. Only the fix cost part of the rate is calculated according to the capacity.

Would it be possible to calculate variable cost according to capacitiy? From a business point of view, it makes sense to do it.

Thanks in advance for your help.

Best regards

Jose

[Former Member · Accepted solution]

Hi Jose,

Do you need to mandatorily show them as variable? y not just show them as fixed so that system would calculate the new price based on capacity. Not sure if this will have any other impacts.

Best Regards

Vimal

[Former Member · Accepted solution]

Hi Vimal,

I could show them as fixed but it is not the problem. The problem is that if I define them as fixed, when I go to calculate deviation for the cost center (I know it is not very common but I need it this time to calculate subactivity), the target cost remain fixed (it doesn't change when level of occupation change). Only If the cost is defined as variable the target cost will change when level of occupation changes.

Thanks for your answers.

Best Regards

Jose

[Former Member · Accepted solution]

HI Jose,

U r right. But the requirement i guess is kind of a circular reference in excel sheet one is dependent on other..Anyways you might have to convince the client in any of the ways.. Anyhow let's wait for the experts for more opinion.

Best Regards

Vimal

[ajaycwa1981 · Accepted solution]

Hi Vimal

In Act Type master you need to select the Price indicator as "Auto based on Capacity".... However, note that only fixed costs can be divided by capacity...THats std design and it makes sense also

Since you planned expenses based on activity, your expenses wont be divided by capacity... One work around is to Keep Capacity = Planned Qty for the time being - Calculate the prices - Then change the Capacity figure again

However, thats not the right way of doing it. but thats the only solution if you cant plan your expenses independant of act type

br, Ajay M

[Former Member · Accepted solution]

Yes.. Jose, you can try some user exit or ABAP help to replace the activity quatity by capacity

while calculating the activity price.

Best Regards

Vimal

[Former Member · Accepted solution]

Hi Vimal:

I was looking for a user-exit for the rate calculation but I didn't find anything until now.

I will continue to looking for it.

Thanks.

Jose