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Activity Based Costing Guide

The document discusses Activity Based Costing concepts in SAP, including how to: 1. Create cost centers, secondary cost elements, and activity types to define where costs are incurred and how activities are measured. 2. Assign activity types and prices to resources and process orders to track actual costs. 3. Allocate costs using either a "push" cash flow method through assessment and distribution cycles or a "pull" quantity input method to distribute overhead costs to cost objects. 4. View actual cost line items for cost centers and settle order costs after allocation is complete.

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Prakash Palanisamy
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70 views9 pages

Activity Based Costing Guide

The document discusses Activity Based Costing concepts in SAP, including how to: 1. Create cost centers, secondary cost elements, and activity types to define where costs are incurred and how activities are measured. 2. Assign activity types and prices to resources and process orders to track actual costs. 3. Allocate costs using either a "push" cash flow method through assessment and distribution cycles or a "pull" quantity input method to distribute overhead costs to cost objects. 4. View actual cost line items for cost centers and settle order costs after allocation is complete.

Uploaded by

Prakash Palanisamy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Activity Based Costing

Prakash Palanisamy
Contents
Create of Cost Center:............................................................................................................................. 2
Create of Secondary Cost Element: ........................................................................................................ 2
Create of Activity Type: ........................................................................................................................... 3
Activity Output/Prices:............................................................................................................................ 3
Assign Activity type and cost center to Resource: .................................................................................. 4
Create Process Order: ............................................................................................................................. 4
Cost Analysis: .......................................................................................................................................... 5
Method of allocating cost: ...................................................................................................................... 5
Create Distribution cycle:........................................................................................................................ 6
Actual cost line items for cost center: .................................................................................................... 7
Actual Settlement – Order ...................................................................................................................... 7
Create of Cost Center:
Transaction Code: KS01

An organizational unit within a controlling area that represents a defined location of cost incurrence. The
definition can be based on: Functional requirements, Allocation criteria, Physical location, Responsibility for
costs.

Create of Secondary Cost Element:


Transaction Code: KA06
Secondary cost elements can only be created and administrated in cost accounting (CO). They portray
internal value flows, such as those found in internal activity allocation, overhead calculations and
settlement transactions.
Create of Activity Type:
Transaction Code: KL01

Activity types describe the activity produced by a cost center and are measured in units of time or quantity.
In activity type planning, control data determines whether the activity price for evaluation of the activity type
is manually set or is derived iteratively through activity price calculation.

Activity Output/Prices:
Transaction Code: KP26
Assign Activity type and cost center to Resource:
Transaction Code: CR01

Create Process Order:


Transaction Code: COR1
Cost Analysis:
Transaction Code: COR3

After confirm this process order, will get the actual cost of the process.

Method of allocating cost:

It has two methods, one is Cash flow method (PUSH) another one is Quantity input
method (PULL).

Push approach is a method of overhead allocation, it has two types; one is Assessment
cycle another one is Distribution cycle.

Pull approach is a method of overhead allocation i.e indirect activities allocation, template
allocation.
Create Distribution cycle:
Transaction Code: KSU1
Actual cost line items for cost center:
Transaction Code: KSB1

After allocation, Amount distribution as per maintain percentage.

Actual Settlement – Order


Transaction Code: KO88

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