The activity type is a classification system used to categorize the tasks performed within a controlling area by one or more cost centers.
When a cost center provides services to other cost centers, orders, or processes, it signifies the utilization of its resources. The expenses associated with these resources must be distributed to the recipients of the services. Activity types play a crucial role in this cost allocation process.
In the context of internal activity allocation, the quantity of the activity, such as the number of consulting hours, is recorded within the SAP system, either manually or automatically.
The system computes the corresponding costs based on the activity price and generates a debit for the recipient and a credit for the sender, accounting for both the quantity and the associated expenses. Internal activity allocation relies on secondary cost elements, which are predefined values stored in the master data of the activity types.
To control the application of an activity type to specific categories of cost centers, you can specify the allowable cost center categories in the activity type master record. You have the option to define up to eight permitted cost center categories or leave the assignments as "unrestricted" by entering an asterisk (*).
The activity type category is employed to determine how and when an activity type is entered and allocated. For instance, you may choose to permit direct allocation for some activities while specifying that others should not be allocated at all or only indirectly.
To facilitate internal activity allocation, you must specify which cost centers offer particular activity types and at what prices. This is accomplished within the SAP system by planning the activity output and prices for a cost center.
For direct activity allocation, you manually input the quantity of the activity to be allocated. In order for cost allocation and activity allocation to take place, the SAP system assesses the allocated activity amount using the sender's price for that specific activity type. When performing a direct activity allocation, the planned price for the 'cost center/activity type' combination is employed in this calculation.
You have the option to manually enter the planned price or have it automatically computed by the system during the planning process. To enable both the allocation of costs and activities, the SAP System assesses the allocated activity quantity at the price specified by the sender for that activity type. This method is suitable for scenarios where price calculations are not intricate, such as when prices are determined internally within the organization and do not depend on internally produced activities, or when rates are contingent on external supplier prices rather than cost center expenses.
Advantages of Activity Type
- In Cost Center Accounting, expenses are charged to products when they make use of the services provided by the Cost Center.
- To plan and distribute activities in Cost Center Accounting, the system tracks quantities measured in terms of activity units.
- Each activity within a Cost Center is associated with activity types, and the costs can be attributed to these specific activity types.
- When creating activity types, you have the option to input their prices manually or have the system calculate them based on the allocated expenses.
- The process of cost planning, allocation, and control can be carried out either during the definition of an activity or at the level of the Cost Center.