By Tom King
When I was a charter member of my company's SAP FICO product costing team, the first item I encountered was activity type. Activity types classify the activities performed by cost centers. Activity quantities serve as tracing factors for allocating costs to receivers, such as other cost centers, orders, and WBS elements. First, in this article, let's create an activity type.
2026 editorial note: The screenshots and examples originate from this article’s 2017 tutorial and illustrate classic activity-type settings. SAP S/4HANA Cloud Public Edition supports a restricted set of categories and pricing options; SAP’s documented F1605A creation procedure uses activity type category 1. Check the supported settings for your edition, release, and activated scope.
Table of Contents
- Create Activity Type
- Assign Cost Element
- Assign Category
- Price Indicator
- More Activity Types
- Glossary
Create Activity Type
Where available for your release and assigned business role, use the Manage Activity Types app (SAP Fiori ID F1605A) to create and maintain activity type master data.
In SAP S/4HANA on-premise or SAP S/4HANA Cloud Private Edition, you can also use SAP GUI transaction KL01. Assign an activity unit of measure as shown in Figure 1.
Figure 1 Create Activity Type Basic Data Tab
In this example, we assign KWH for electricity consumption, or you could assign HR for machine hours.
Assign Cost Element
For internal activity allocation in SAP S/4HANA, assign a G/L account of type Secondary Costs with cost element category 43 — Internal Activity Allocation, as shown in Figure 2.
Figure 2 Assign Secondary Cost Element
The allocation uses this account to credit the sender cost center and debit the receiver cost object. Creating the activity type alone does not establish the allocation price: maintain or calculate the price for the relevant cost center/activity type combination and period.
Assign Category
You next assign an A Type (Activity Type) category as shown in Figures 3 and 4.
Figure 3 A Type Category 1
Figure 4 AType Category 2
The activity type category controls whether and how activity quantities are recorded and allocated. Classic categories include direct allocation (1), indirect determination and allocation (2), manual entry with indirect allocation (3), and quantity recording without allocation (4). Actual category 5 supports target=actual allocation and requires a different planning category, normally 1, 2, or 3.
You can maintain separate planned and actual activity type categories. If the actual category is blank, the planned category is used. The supported combinations depend on the allocation method and deployment model.
Price Indicator
You enter the Price indicator as shown in Figures 5 and 6.
Figure 5 Price Indicator 1
The price indicator controls how the activity price is determined. Planned indicator 1 calculates prices automatically using planned activity. Actual indicator 5 calculates actual prices using actual activity. These are separate planned and actual settings; activity type category 5 and price indicator 5 have different meanings.
Figure 6 Actual Price Indicator 5
For example, allocating 10 hours at $50 per hour transfers $500 from the sender cost center to the receiver. If a rate is maintained for a price unit greater than one, divide the quantity multiplied by the rate by that price unit. Actual price calculation and any subsequent revaluation require the corresponding process and configuration.
To see how activity types, cost centers, and routing standard values connect in manufacturing, read how work centers impact product costing. For the broader costing process, see our SAP Product Cost Controlling guide.
More Activity Types
Continue with the worked example of category 1 activity allocations in the next article.
SAP Activity Postings: Category 1 Activity Types
Need Help with SAP Activity Types and Cost Allocations?
Check that your activity quantities, prices, and allocation settings explain where manufacturing costs come from.
ERPCorp helps teams review activity type master data, cost center activity prices, work center assignments, and Product Costing processes in SAP S/4HANA.
Glossary
Activity Type
A master-data classification of activities supplied by cost centers, such as machine hours or maintenance hours.
Activity Type Category
A setting controlling whether and how an activity type’s quantities are recorded and allocated. Separate planned and actual settings can be maintained where supported.
Activity Unit
The unit in which activity output is measured, such as hours or kilowatt-hours.
Actual Activity Quantity
The quantity of activity recorded or determined for actual allocation during a period.
Actual Price Indicator
A setting controlling how the actual activity price is determined; indicator 5 calculates it automatically based on actual activity.
Allocation Cost Element
The secondary-cost account used for internal activity allocation. In SAP S/4HANA, it is a G/L account with cost element category 43.
Cost Center
An organizational unit that collects costs for a defined area of responsibility and can supply or receive internal activities.
Direct Activity Allocation
An allocation in which the sender cost center, receiver, activity type, and activity quantity are specified, with costs calculated using the applicable activity price.
Indirect Activity Allocation
Allocation of activity quantities and associated costs using configured sender/receiver relationships and tracing factors.
Planned Activity Quantity
The expected activity output or consumption used in activity planning and price calculation.
Planned Price Indicator
A setting controlling how a planned activity price is determined. Indicator 1 uses planned activity for automatic calculation; indicator 3 allows manual price entry in the classic model.
Price Unit
The number of activity units to which an activity price applies. Allocation value equals quantity multiplied by price, divided by price unit.
Receiver Cost Object
The real Controlling object receiving the activity costs, such as a cost center, order, or WBS element.
Sender Cost Center
The cost center supplying the activity and receiving the credit from an internal activity allocation.
Target=Actual Activity Allocation
A special indirect allocation method using planned activity input adjusted for the operating rate. In the classic model, it uses actual activity type category 5.
SAP Documentation
About the Author
Tom King is the author of this activity-type tutorial. Learn more about his SAP Controlling background on Tom King’s speaker profile.