Actual Activity allocation and Planned and actual activity comparison issue in Product Costing

[Former Member]

Friends,

I have tried to explain the issue i am facing currently under Product Costing......

1.Cost Component Structure

10 – Material

20 – Labour

30 – Diesel

40 – Electricity

2.KP26 – Planned under Fixed Price

Labour – 2.0 HR

Diesel – 1.0 HR

Electricity – 5.0 HR

3. When I run CK11N system collecting correct rates for all activities (Costing Lot Size- 1)

Like;

1              E              LAB10    994310                  2.00        2.00        AED        1.0          HR Labour Cost New

2              E              DIE20    994320                  5.00        5.00        AED        1.0          HR Diesel Cost New

3              E              ELE30    994330                  1.00        1.00        AED        1.0          HR Electricity Cost

4              M            1100000042                          5.00        0.00        AED        1              PC RAW MATERIAL BAKERY CONSUMED

5              G            994201                                0.00        0.00        AED                        Depriciation Cost

6              G            994202                                0.00        0.00        AED                        Sales & Distribution Cost

                                                                          13.00                    AED       

4.When I do process order Cost analysis for the produced goods it shows me different figures as my

BOM – RM is 1100000042 1 Quantity

Routing – All activity time is 1 Hr

40002                    RAW MATERIAL BAKERY CONSUMED          1005/1100000042            5.00

40015                    COST OF GOODS MANUFACTURED              1005/4400000071            13.00-

994310                  Labour Cost New                                              CBAKYPDDXB/LAB10      1.33

994320                  Diesel Cost New                                              CBAKYPDDXB/DIE20      3.33

994330                  Electricity Cost                                                CBAKYPDDXB/ELE30      0.67

                                                                                                                                          2.67- AED

Note :- As per my understanding it should be

    Labour Cost New                                            2.00

                Diesel Cost New                                              5.00

                Electricity Cost                                                1.00

5.Now after Process Order confirmation

40002                    RAW MATERIAL BAKERY CONSUMED          1005/1100000042            5.00

40015                    COST OF GOODS MANUFACTURED              1005/4400000071            00.00

994310                  Labour Cost New                                              CBAKYPDDXB/LAB10      4.00

994320                  Diesel Cost New                                              CBAKYPDDXB/DIE20      5.00

994330                  Electricity Cost                                                CBAKYPDDXB/ELE30      2.00

                                                                                                                                          16.00

6.For Month end actual Activity calculation and load the activaty actual rates on product

I have configured the system in below manner

• 1 Work center = Mapped to 1 Production Cost center
• Three Different Activities mapped to Secondary Cost Element with 43 Category
• For Electrictity Activity assesment from Primary to secondary 1 more cost element created with

      Category 42 Like; 994215-Electricity Cost All

• One Actual Assessment has been configured to allocate Electricity cost from Primary Cost element to

      Product/Order

7.Assessment Cycle Details

Controlling Area      1000 Controlling Area

Cycle                ZELE01                  Status    Reviewed

Start Date 01.01.2014  To  31.10.2014

Text                  Elec. Cost Allocation to PROD

IND- Interactive

Assessment CEle       994215      Electricity Cost All

Sender

Cost Center    CBAKYDXBAD

Cost Element 40204

Receiver

Cost Center    CBAKYPDDXB

Tracing Factor

1. Var.portion type – Actual Activity

Selaction Criteria

Activity Type - ELE30

Receivers Tracing Factor

Cost Ctr Factor per        100

CBAKYPDDXB 100

8.I have received the actuall electricity bill for 1100 AED and the same has accocated through KSU5

After Cycle run when I follow below procedure

• KSS2 Actual cost splitting

CBAKYPDDXB                    Production Dxb                LAB01                    183.33

CBAKYPDDXB                    Production Dxb                DIE02                    183.33

CBAKYPDDXB                    Production Dxb                ELE03                    183.33

CBAKYPDDXB                    Production Dxb                DIE20                    183.33

CBAKYPDDXB                    Production Dxb                ELE30                    183.33

CBAKYPDDXB                    Production Dxb                LAB10                    183.35

                                                                                                                1100.00

Issue – System Split Electricity cost between all the activities assigned to Workcentres Cost Centre.

But I want to post that cost only to ELE30 Activity and not for all

• When I RUN KSSI for actual Price determination system shows

OTy        Object                                  Name                  AUn                Act Qty      Total price    Price (Fixed)              PUnit

ATY        CBAKYPDDXB/DIE20        Production Dxb      HR                  5.0          366.66                  366.66                    10

ATY        CBAKYPDDXB/ELE30        Production Dxb      HR                  2.0          916.65                  916.65                    10

ATY        CBAKYPDDXB/LAB10        Production Dxb      HR                  2.0          916.75                916.75                    10

                                                                                                                                                      2200.06

1. 2200.06 is almost double than 1100.00 which is actual electricity cost and the same is actually determined for all the activities.

• After revaluation of the process order system posting below values

40002                    RAW MATERIAL BAKERY CONSUMED          1005/1100000042                            5.00        5.00

40015                    COST OF GOODS MANUFACTURED              1005/4400000071                            13.00-    13.00-

994310                  Labour Cost New                                            CBAKYPDDXB/LAB10                      1.33        183.35

994320                  Diesel Cost New                                              CBAKYPDDXB/DIE20                      3.33        183.33

994330                  Electricity Cost                                                CBAKYPDDXB/ELE30                      0.67        183.33

                                                                                                                                                          2.67-      542.01

Production Variance is posted as 542.01….

I strongly believe there is some issue in configuration for activity allocation….

Main issue is

Point No. 4 – Different Figures in Process Order Cost Analysis

Point No. 7 – Assessment cycle run

Point No. 8 – KSS2 and KSII for Actual cost Allocation and Production variance…

Friends… I have tried to explain maximum please help me to understand the concept or missing configuration/Process.

Thanks

Sagar Chinchkar

[rajneesh_saxena · Accepted solution]

Dear Sagar

Your issues :

Point No. 4; Seems you have used diifferent valuation variant for Std Cost estimate and order cost estimate. If the wo are same you will get the same results. Check it at OKZ3. There you will get Costing variant for plan. In that costing variant check the valuation variant.

Point no 7; You need to use Cost center splitting in order to get correct results, otherwise this is system standard behavior that it will divide the cost equally amongst all activities involved in the CC.

Regards

Rajneesh Saxena

[Former Member · Accepted solution]

Dear Rajneesh,

I have made the changes as suggested....

• It seems now my Order Cost analysis and Product cost analysis are showing the same figures.

• I have also maintained cost center splitting structure for ELE30 Activity allocation.

Structure Z1

Splitting structure for AT

Assignment 10

Electricity Cost

100

Allocation for ELE

Cost Element	994215
Activity Type	ELE30

Splitting Rule

100

Allocation for ELE

12

Activity quantity

Version 0

• In my case actual activity confirmed is 3.1 for 2 orders in period 5

Order 1 - QTY 2

Order 2 - QTY 1.1

Total actual Electricity exp is 1150 in period 5

followed procedure to post actual activity on product is mentioned below

1. KSS2 Actual cost splitting - Result as expected 1150 for ELE30
2. KSII Actual price determination - Result as expected 3.1 actual confirmed QTY for ELE30 with actual price

       QTY 3.1         Tot Price 3,709.68        Planned(FIX) 3,709.68     Per Units 10

       (System is doing 1150/3.1*10=3709.68)

    3.CON2 Actual revaluation of orders

      Here while reevaluating the Process Orders system calculation is different

Order 1 - QTY 2 -   558.00

Order 2 - QTY 1.1 - 407.56

Total -                    965.57

     4. After CON2 system is changing the value of other activities like

     LAB10 - Actual confirmed Value 10  to 0 

     DIE20 - Actual  confirmed Value 10  to 0

Which should not be the case....

                                                                                                              PL     Act     Var

40002	RAW MATERIAL BAKERY CONSUMED	1005/1100000042	10.00	15.00	50.00
40015	COST OF GOODS MANUFACTURED	1005/4400000074	26.00-	26.00-
994201	Depriciation Cost	WMBDDEP01	1.00	0.00	100.00-
994202	Sales & Distribution Cost	WMBDS&A01	1.00	0.00	100.00-
994310	Labour Cost New	CBAKYPDDXB/LAB10	4.00	0.00	100.00-
994320	Diesel Cost New	CBAKYPDDXB/DIE20	10.00	0.00	100.00-
994330	Electricity Cost	CBAKYPDDXB/ELE30	2.00	408.06	20,303.00

If we want to just post Electricity cost based on actual Electricity expenses and Labor and Diesel are based on planned activity rates.

What setting is required in current system.....

Million thanks in advance....

Regards

Sagar Chinchkar