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Cost Center Activity Type

- A cost center represents a work center or department where costs are collected. An activity type represents the capacity of a cost center, such as labor hours or machine hours. - One can link an activity type to a cost center by planning the activity type on the cost center in the system. This allows the activity's costs to flow to the associated cost center. - A single cost center can have multiple activity types linked to it to represent different resources or operations that occur at that cost center.

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Jose Luis Becerril Burgos
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128 views5 pages

Cost Center Activity Type

- A cost center represents a work center or department where costs are collected. An activity type represents the capacity of a cost center, such as labor hours or machine hours. - One can link an activity type to a cost center by planning the activity type on the cost center in the system. This allows the activity's costs to flow to the associated cost center. - A single cost center can have multiple activity types linked to it to represent different resources or operations that occur at that cost center.

Uploaded by

Jose Luis Becerril Burgos
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Cost Center & Activity Type

This question is answered

Hi,
What is the relationship between cost center and activity type.
We do define cost element for Activity Allocation which will be assigned to activity type. But
how can we know the this activity type is assign to the particular cost center and the cost will
flow to this cost center?
Please let me know if I need to give more clarification for the above query?
Regards,
Pankaj

Pankaj Thakker
December 26, 2009 at 09:19 AM
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Correct Answer

Nick Kartelias replied


December 30, 2009 at 12:47 PM

Hi

An activity type represents the capacity of a cost center e.g. labour hours or machine hours.
One can link the activity type to a cost center by planning the activity type on the cost center.
Hope this helps.
Manette
0View this answer in context

12 replies

Ghurappa Athirala replied

December 26, 2009 at 09:39 AM

Dear Pankaj

In activity type we can maintain secondary cost element ,this secondary cost element capture
the activity cost with help of cos center
when activiy planning KP26 we can maintaing the activity price with combination of cost center,
so the activity take the price from that cost center
Regards
A.Guru Prasad
0

likes

Debashis Sahoo replied


December 26, 2009 at 14:11 PM

Dear Guru,

Can u tell me what is activity based costing ?


Thanks,
sahoo
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Pankaj Thakker replied


December 27, 2009 at 07:42 AM

HI Guru,

Thanks for the reply.


one more thing, is the cost element need to be secondary only?
Regards,
Pankaj
0

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Venkata Dara replied


December 27, 2009 at 08:40 AM

Hi

Yes the Cost Element must be of Secondary Cost Element Category only , category 43 for
Activity Allocation.

Regards
Venkat
Edited by: Venkat Dara on Dec 27, 2009 8:08 AM
Edited by: Venkat Dara on Dec 27, 2009 8:40 AM
0

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Ghurappa Athirala replied


December 27, 2009 at 14:43 PM

yes it should be secondary cost element only


0

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Ghurappa Athirala replied


December 27, 2009 at 14:43 PM

yes it should be secondary cost element only


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K.Madhu Kumar replied


December 28, 2009 at 05:29 AM

Dear Pankaj,

Just i am Giving simple steps


1) Cost center - it is attached to work center & collects the costs of operation ( KS01)
2) Primary cost elements - Primary costs are nothing but Material cost, costs for external
procurement ( KA01)
3) Secondary costs elements - Secondary costs elements are, production costs & Production
overheads costs ( KA06)
4) activity types - Basically activity types are defined in KL01, this are used in Routing for giving
timings, i.e Machine time
Labour time etc.
5) Finally all the above will be linked in KP26, here we plan the activity price.
Regards
Madhu Kumar
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chandra babu replied


December 28, 2009 at 12:40 PM

HI,

the difference b/n coster and activity type


coster is a short term capture which is used for internal reporting purpose . all primary cost
element has been captured in costcenter
then whers as activity type nothing but which is calcuated maichnery rate for particular task or
activity eg : in constucitons buildings avrious dept are there
each department how much consumption power,manpower .machines , funitures are
processing in activity type
which is used for secondory cost element
With regards
G chandrababu
0
Correct Answer
likes

Nick Kartelias replied


December 30, 2009 at 12:47 PM

Hi

An activity type represents the capacity of a cost center e.g. labour hours or machine hours.
One can link the activity type to a cost center by planning the activity type on the cost center.
Hope this helps.
Manette
0

likes

Debashis Sahoo replied


January 02, 2010 at 16:07 PM

Hi,

Can one cost center have multiple activity type if yes , How ?
Plz tell.
Sahoo

Edited by: dskuna1 on Jan 2, 2010 4:07 PM


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Taral Patel replied


January 02, 2010 at 17:39 PM

Hi,

One cost center can have multiple activity types linked with it.
For Ex. Take the example of pharmaceutical industry.
Diferent operations (resources / work center) like Raw material mixing, grinding,
demoisturising, sterilising, packing are done.
For this each operation machines, labors and others resorces are requires, based on which
you can define diferent activity types like Labor hour, machine hour and others based on cost
calculation requirement.
Hope it will clear to you. Pls get back in case of any query.
Thanks & Regards,
Taral Patel
0

likes

hbvcfhgf gfhgfjjjj replied


January 03, 2010 at 06:10 AM

Dear Patel,

Very good morning. And also happy new Year 2010...


In KP06 we have to given planning for cost element and cost center (Both Production & non
Prdn.) & also there is a activity type input (I don't know wt is that's use)
In Kp26 we given the activity planning of prdn cost center (What I understand)
In Kb21n we given the activity prices (actual) when service to production cost center
transferred (wt i understand) through assessment.
If any mistake kindly tell me with details plz if u r fully confident.
Thanks & Regards,
Sahoo

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