Hi
In Cost Accounting terms, an activity is a process that can be counted and that attracts costs. In Business terms, a production process is achieved by a network of activities. If one needs to find the cost of each activity, one needs to know the acitivities and the quantities of work done by each. The purpose of CO-ABC activity based costing component of SAP CO Module is to plan, monitor and settle activity types in the accounts of cost centers. activity type serve as allocation bases and are thus used as cost drivers to send incurred costs to recievers. The CO-ABC allows to develop costing in a logical fashion;
1. Define the activity types that are of interest to the Business because they add value, attract costs or both.
2. Specify how each activity type will be measured and what units will be used.
3. Create a plan using activity types and their quantities
4. Extend the plan to include the costs that depend on activities and the rates to be applied.
5. Allocate or set up rules to allocate activity costs for both planned and actual data.
6. Predistribute the fixed costs and attach a value to each activity type that cannot be measured.
7. Determine the variances over a period and allocate them to activites or cost centers.
Bluesky
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