Let's start with activity type category 1 (manual entry, manual allocation) which is the most common. Activity types defined with this category post directly from a cost center to a receiver cost object.
Look at the definition of activity type CATEG1 as shown in Figure 1. In this case, Actl Acty Type Cat. (Actual Activity Type Category) is blank, which means it is the same as the plan activity type category, or 1 in this example.
Figure 1 Change Activity Type
Because the plan category is 1, you use transactions KP26 and KP06 for planning.
You use KP26 for planning the activity quantity and prices in a cost center for a given period/year.
You use KP06 for assigning costs by cost element to the activity type/cost center combination.
You can also allocate costs to a cost center/activity type from another activity type.
Since the price indicator is 1, you can use transaction KSPI to calculate the planned activity price.
Let's look at a simple example of making category 1 activity type postings. 10,000 activity units are planned for Fiscal Year 2017 with KP26 as shown in Figure 2.
Figure 2 Plan Activity Quantity KP26
We've also manually assigned Plan Fixed and Variable Costs to this activity type as shown in Figure 3. The Plan Variable Costs are dependent upon how much activity you plan, while the Plan Fixed Costs are independent of the Plan Activity quantity.
Figure 3 Plan Activity Fixed And Variable Costs With KP26
You can also calculate the plan activity price automatically with transaction KSPI. Because there are fixed and variable costs planned for this activity type/cost center, the activity price will have a fixed portion and a variable portion as shown in Figure 4.
Figure 4 Activity Type Price Planning With KP26
Category 1 activities can either be directly posted, with transaction KB21N, or one of the production confirmation transactions, CO11N or COR6N, or with template allocation. Let's look at transaction KB21N.
You first determine an activity quantity to be processed at the sender cost center and then specify a cost object to receive the allocation. Production confirmations rely on routing or recipe standard values used in calculations defined for specific work centers that are assigned to the sender cost centers. The confirmation results in a quantity of activity posted from the assigned cost center and allocated to the specific production order, process order, or product cost collector. Template calculations can also be used to post category 1 activity types. Templates allow you to create formulas which can be used to calculate the amount of activity to post in the cost center. As a part of period end closing the templates can be allocated by using transactions KPAS or CPTA to generate the postings.
Let’s analyze what happens when a posting is made with transaction KB21N. The receiving cost object is a cost center. First we'll look at the Cost Center Actual/Target report S_ALR_87013625 as shown in Figure 5, before posting so that we can set a baseline for the sending and receiving cost centers.
Figure 5 Cost Center Target Actual Report Before Posting
No Actual Cost has posted to cost center SND1 and the target cost of 25,000.00 is for cost element 599999 Depreciation, which was planned as fixed. No targets are possible for the variably planned costs because no activity has posted.
When you make an actual posting for a category 1 activity type with transaction KB21N, you must enter both the sender cost center and the receiving cost object. In this case, the receiving cost center is RCV1A as shown in Figure 6.
Figure 6 Enter Direct Activity Allocation Transaction KB21N
After you post 100 units of activity type CATEG1 from cost center SND1, the Cost Center Actual/Target/Variance report now shows the information shown in Figure 7.
Figure 7 Cost Center Target Actual Report After Posting
You now see targets posted for the variable cost elements. The target value is based on the planned amount per unit of activity times the quantity. Note that the fixed target does not change. Because cost element 599999 is planned as fixed, the target will not change no matter how much activity is posted. A credit posting is made to the sender cost center SND1 of the activity price times the quantity of activity posted. The cost element used is the one assigned to the activity type.
The offset to the credit posting goes to receiver cost center RCV1A, in this example, as shown in Figure 8.
Figure 8 Cost Center Target Actual Report For Receiver Cost Center RCV1A
The posting is identified using the same cost element 943901 as the credit posting for sender cost center SND1. Although we used a cost center as a receiver, we could have used any cost object, including internal orders, production orders, process orders, product cost collectors, WBS elements, and business processes.
Now that we've looked at activity type category 1, we'll examine activity type category 2 in the next blog:
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I am confused here regarding target cost postings after KB21N.
in KP26, the total quantity is 10000. In KP06, the total price (fixed + variable) is 10,50,000 /- . So, per unit cost is 10,50,000/10,000 = 105 /-
So for 100 quanity price = 105 * 100 = 10,500 /-
Now, after KB21N the posting in SND1 are 10,500 /- in Actual cost (which is correct)
but, under Target cost a value of 2,500 /- and 5,000 /- is posted as per the cost elements provided in KP06. As per the explanation, this
Target Cost is varaible target cost for 100 quantity. How this was calculated and how it got posted on ??