Former Member

# Requirement : Want to allocate the cost of Non-Activity FI Cost booked un

Hi,

Requirement :

Want to allocate the cost of Non-Activity FI Cost booked under GL, to be allocated to Production order based on agreed ratio(Ex. SKF / Activity Qty/ etcu2026)

As per our experience, we proposing the below solution, but i am not 100% confidence on this please go through the problem and solution and suggest.

Solution:

We discussed upon costing sheet, but considering costing sheet it will be a greater challenge. I feel the best way of associating such cost to the production order would be Activity Cost.

Example:

Admin OH booked every month on actual should be allocated to Production / process orders. In such case considering the we have two kind of products which will take 60/40 ratio.

Hence all cost booked to Admin OH(cost element of all cost center / selected cost centers), will first be divided into two Cost center in the 60/40 ratio by using cost center allocation. Further based on the actual Qty produced we want the cost to be allocated between the production / process orders.

Procedure:

1) Configuration

a. Create a cost center allocation, which will divide the total cost in to 60/40 ratio within two cost centers

b. Create a Activity splitting rule & assign the rule( ratio on which the cost must be split, ex: SKF/ Activity Qty / etcu2026)

c. Assign the Cost element (groups),

d. Assign the cost center (group) for the same,

e. Ensure the activity price strategy sequence in the Valuation variant has first priority as actual price.

2) Process

a. After Financial cost booking, run the Cost center allocation,

b. Post that run Activity cost splitting,

c. Run the order actual value revaluation,

d. Since the actual price of activity has been updated with the new value, the production / process order will also get revalued.

Thanks

Venkat

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Former Member
Posted on Dec 28, 2011 at 09:31 AM

Yes. The logic seems OK and this will work through activity types.

Sangram