Processing Cost Allocations

To display the costs incurred in Controlling (CO) in Profitability Analysis (CO-PA), transfer the particular costs for the cost centers, projects, production orders, and internal orders, if they are not allocated, to the inventory. You can transfer the cost through different techniques.

As an example, you can execute a direct or indirect allocation of internal activities in CO-PA for cost centers. Along with the sender (cost center) and the receiver (profitability segment), enter the quantity of the activity, and valuate it with the planned price of the activity type. The final amount is credited to the sender and debited to the profitability segment that receives the quantity. Therefore, as an example, a transport activity can be directly posted to particular customers within CO-PA without being posted to a cost center or an order.

If you use the cost component split in Cost Center Accounting (CO-CCA), you can divide the prices into cost components during allocations to CO-PA.

The allocation of cost and revenues from Internal Orders and Projects can be performed using the settlement. You can use the periodic or full settlement. You can settle percentage or fixed value, as well as the values only from specific cost elements, using a source structure.

You can settle the cost variances from production orders to CO-PA.

To settle the variance categories to costing-based CO-PA, assign the combination of variance categories and cost elements to the specific value fields.

To settle the variances to Margin Analysis, use the Price Difference Splitting Profile to assign the combination of cost elements and variance categories to the scheduled target accounts.

To allocate cost center cost to CO-PA, use the assessment cycle technique or the indirect activity allocation cycle technique. If you want to allocate overhead costs that have not been allocated to cost objects to CO-PA, complete the cost in CO-PA according to market segments.

Like Financial Accounting (FI), Margin Analysis uses the ACDOCA table for the actual data, and ACDOCP for plan data. But those data might not be allocated to profitability segments in FI.

Costing-based CO-PA does not have that data because it still uses its own tables, which are CE3xxxx for total data, CE1xxxx for actual line items, and CE2xxxx for plan line items. In both cases, you can allocate the overhead cost to market segments in CO-PA, and complete the data in costing-based CO-PA.

The function for assessing cost center costs allows you to transfer the balance amounts in production cost centers, as well as the balance amounts or total actual costs in sales and administrative cost centers, to CO-PA.

The cost centers are credited by the amount allocated. As a result, all costs can be allocated once. Assess the cost center costs in the same way as with CO-OM. Define cycles and execute them on a periodic basis. These cycles contain the control information for the assessment and can be maintained in Customizing.

Defining and Executing an Assessment Cycle

A cycle controls how an assessment is processed. It contains all the relevant information about the senders, receivers, sender rules, receiver rules, and tracing factors. Each cycle can contain a number of segments. A segment describes a combination of senders and receivers that are to be processed together.

In theory, you could create one cycle for transferring all the overhead costs to CO-PA. However, for performance and technical reasons, it is better to create several cycles and process them sequentially. When not using the iteration function, you can use one or several cycles.

Note

The assessment in Cost Center Accounting (CO-CCA) includes the iteration function. The iteration is repeated until each sender is fully credited (a small remainder may be left over in some cases). The assessment to CO-PA does not have this function.

To allocate the different areas of your organization to CO-PA at different times, divide your assessment into separate cycles. This division has the advantage that you only need to repeat the affected cycles when errors or changes occur.

A cycle can contain the sender cost centers or processes from one controlling area, and use the values from either the costing-based CO-PA or Margin Analysis as tracing factors.

The sender cost centers or processes are credited in the assessment cost element, specified in the segment of the cycle.

The receiver is defined by a combination of characteristic values from a profitability segment. These values are debited to the profitability segment using an assessment cost element, such as Margin Analysis, and value fields, such as the costing-based CO-PA, which you specified for each segment of the cycle.

Allocating Processes

In Margin Analysis, the costs are debited with the same allocation cost element. In costing-based CO-PA, assign this allocation cost element to the required value field in the PA transfer structure CO.

In dynamic process allocation, you can determine which profitability segment used the process and, therefore, should receive the process costs. In this case, use a process template to define the formulas and functions. These select the cost drivers from CO-PA or other sources to assign the costs accurately to their cause.

In Customizing, assign this process template to characteristics that are used to select the cost drivers. Then, assign update characteristics, which ultimately determine the profitability segments to which the business process costs are allocated.

You can transfer overhead costs from CO-CCA either on an activity-allocation basis or on a periodic basis. You can transfer the activities either directly, using the Enter Direct Activity Allocation app, or indirectly to CO-PA, using the Run Actual Indirect Activity Allocation Profitability Analysis (KEG5) app.

You can use a PA transfer structure to control the secondary cost element of activity allocation in the value fields for CO-PA.

You can transfer the cost component split of the prices for each cost center to CO-PA. To do this transfer, activate the appropriate settings in Customizing, and then enter the cost elements in the various value fields.

• Transfer costs from cost centers, projects, production orders, and internal orders.

• Use assessment cycle technique for cost center cost allocation to CO-PA.

• Use PA transfer structure to control secondary cost element in value fields.

• Cost component split of prices can be transferred to CO-PA.

• Settle production variances to CO-PA using variance categories and cost elements.