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Actual Activity Price Calculation
Former Member
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on ‎2009 Feb 19
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SAP Managed Tags: FIN Controlling
Dear Gurus,
1. I have defined activity type say "Power" through KL01
2. Maintained the planned price through KP26 for the cost center which is going to
use this activity type. say
cost center is "CCTR1"
3. Now there is something as actual activity price calculation at period end
4. When i execute through KSII i get the actual price which is the debited cost
elements of the "CCTR1"
divided by the Activity Type "Power"
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5. The debit balance of cost elements in "CCTR1" is Rs 10000 and activity type
consumed through process
order is 200 KWH, hence the Actual price comes to Rs 50 Rs/KWH. While the planned
price in KP26 is
Rs 6/KWH
How logical is this....
With Regards,
Amit
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Former Member
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‎2009 Feb 19
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Hi Amit,
https://community.sap.com/t5/enterprise-resource-planning-q-a/actual-activity-price-calculation/qaq-p/5169331
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Actual Activity Price Calculation - SAP Community
The Plan Activity Price is calculated by dividing the Total Plan Cost on the Cost Center
with Total Activity Quantity Planned on the Cost Center. For Ex. Total cost planned is
Rs.10,000 and total activity qty planned is 1000KWH. So, Price per unit KWH is
Rs.10/-.
Now, when it comes to actual, the actual activity price is calculated by dividing the
actual cost booked to the cost center divided by the actual activity units generated.
Ex., if the total actual cost booked to the cost center is Rs.1,20,000 and actual activity
generated is 900KWH, then the actual activity price would be 120000/950.
Amit , I hope you are part of Core Team in you implementation (I read it in some of
your prevous thread).
I suggest you something, for capturing of Power Cost, nobody used
Process/Production Order, because it is beyond humar effort to quantiy the
consumption Order-wise.
There are two methods in Cost center accounting, namely, "Direct Actvity Allocation"
and "Indirect Activity Allocation". Pls go through these methods and try to absorb the
power cost through activity type from Production Cost Center.
Pls revert back if further explanation needed...
Srikanth Munnaluri
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Former Member
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‎2009 Feb 19
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Hi Srikanth,
There is a small correction to what you said.
He is not trying to find or plan the consuption per production or Process Order.
The culculations are purely for the Cost Center.
I am sorry if i misunderstood your wordings and you also intended to tell the same
Best Regards
Surya
Former Member
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‎2009 Feb 19
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Hi Surya,
Pls refer to point no. 5 of Amit's question. He mentioned that consumption of
200MWH through process order.
Thanks for your observation
Srikanth Munnaluri
Former Member
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‎2009 Feb 19
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Dear Gurus,
Thanx for your comments.
Please find the request afresh as below.
1. I have created a production cost center say CCTR1 which manufactures a
"chemical product"
2. I have created activity type "PWR" through KL01 and did planning w.r.t CCRT1
and maintained planned say for February month for price as Rs 5/KWH and
planned quantity 100 KWH. Hence for Cost CCTR1, the activity planned quantity
got posted as 100 KWH and under the Credit postings for the CCTR1, the planned
posting came as Rs 500.
3. Now my PP Team for manufacturing the "Chemical Product" made a process
order. They then confirmed the activity as 80 KWH which is the activity PWR
consumed for the "Work Center" which is assigned to the Cost Center "CCTR1"
4.Then FI Team made a posting to Production Cost Center CCTR1 as Repairs and
Maintenance Rs "x"
5. Now is the actual activity price calculation means Rs "x" divided by 80 KWH.
What It means that the cost of the production cost center are absorbed by the
activity which it itself is consuming.
Very confusing. Not Clear to me what the system is trying to do..
With Regards,
Amit
Edited by: Amit Dhanurdhari on Feb 19, 2009 9:19 AM
Former Member
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‎2009 Feb 19
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Hi Srikanth,
You obsevation is right.
Thanks for the correction.
In any case, we will always plan for the cost centers and not for the production or
process orders. This is because we will never have the visibility about the
production orders or process orders.
Best Regards
Surya
Former Member
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‎2009 Feb 19
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Hi Amit,
Let me give some insight into the Activity price calculation and cost obsorption
from Cost Center to Prodcution
1. Normally we incur the production cost through FI like Direct Labor, Power,
Indirect Labour and other indirectct production overheads
2. This cost is posted to Production Cost Centers
3. Now this cost need to be obsorbed to product cost using either Activity
costing through Routing or Overhead costing using costing sheet.
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Since you question is for Activity costing, let us focus only on activity price
and absorption to Product Cost
1. All the direct cost that can be tracked with certain reasonability with activity
types can be absorbed through activity costing to product costing
2. Now in your case, take for example - the industry you are working is power
intensive, then we can track the consumption of Power using activity costing
3. At the first instance, you need to forcast the activity quantities for the month
(based on the production planning)
4. Based on this, you forecast the cost that would be incurred for the expected
output
5. Calculate planned Acvitiy Unit price and update it in KP26. The updation can be
manual or automatic (using Cost Splitting and Price Calculation in case of Activity
independant cost planning)
6. For all the activity confirations to the production/process order, the cost
obsorption will take place based on the planned price
Actual
7. The cost of the power will be booked in FI and posted to Production Cost
Center for the month.
8. The actual Activity quantity will be booked from Production confirmation for the
month
9. At the end of the month, you need to do the actual price calculation. This
calculation will be based on the TOTAL COST BOOKED FOR THE MONTH
TOWARDS POWER FOR THAT COST CENTER DEVIDED BY TOTAL QUANTITY
CONSUMPTION RECORDED IN THE COST CENTER
10. Once this is done, You can revaluate the activity quanitities booked on each of
the production order.
This is how the activity cost aborption will take place in product costing
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Please let me know if you need further details in this regard
Surya
Former Member
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‎2009 Feb 19
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Hi Amit,
I suggest to understand the system in SAP about Product Costing.
When you are confirming the operation(activity in your sense) in Production Order,
that means, you are absorbing the cost from the Production Cost Center and
loading the cost onto the Product (Chemical Product in your case). CO Document
will be posted for this.
During the month, the amount "x" posted to the cost center is getting absorbed
onto the Chemical Product.
There is a difference between the concept of "Cost Center" in traditional legacy
costing system and SAP System. In SAP, Cost Center Accounting is used to absorb
only Overheads. All product related expenses will be captured through Product
Costing.
Amit, once again I suggest you to look into the methods "Direct Activity Allocation"
and "Indirect Allocation", which are the methods used to absorb the Cost fo
Service Cost Center to Production Cost Centers and therefrom to the Product.
Pls award suitable points to encourage us...
Srikanth Munnaluri
Former Member
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Actual Activity Price Calculation - SAP Community

‎2009 Feb 19
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Hi,
Can you briefly explain how the indirect activity allocation works.
Suppose, I have an Activity of Power against a cost center CCTR1. The total costs
(plan/actual) captured against this cost center is 10000 and the total activity
(plan/actual) is 1000 KWH.
This needs to be then allocated to production cost centers CCTR2-10.
By using Indirect activity allocation, do you mean that the activity (units) captured
against Power activity for one cost center will be allocated to other cost centers?
If yes, once this cycle is executed and KSPI / KSII is executed, whether Power
Activity will have rates for all CCTR1-10 cost centers?
Can you pls throw some light on this?
Former Member
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‎2009 Feb 19
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0 Kudos
Hi Swapnik,
Yes, you are right. The quantity of KWH to be tracked using SKF incase of Indirect
Activity Allocation cycle. In direct Activity Allocation, no need for SKF. You can
determine the total quantity of activity output on the sender cost center (Power)
basing on the consumption from Production cost centers.(Target=Actual Method).
When you run the Ind Act Alloc cycle, activity allocation is done to receiving cost
centers based on SKF and when you run KSPI, cost will be tranferred.
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Srikanth Munnaluri
Former Member
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‎2009 Feb 19
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0 Kudos
Hi Amit,
The actual Price calculation based on the actual performance. Means the actual cost
incurred and the actual power (Units) consumed. It has to be correct unless there are
some posting errors
The planned Activity price is purely based on the planned cost and Planned Activity
Quantity.
There could be many reasons why there is such big difference between Actual Price
Rs.50 per unit and Planned Price Rs.6 per unit. The reasons could be:
1. Your planning of either costs or power units could be wrong
2. There could be wrong postings regarding the power cost
3. There could be actual power units captured to the costs center could be lesser than
the actual power units
I hope this could help you in you analysis
Best regards
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Surya
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