Activity types are units that classify the activities performed on cost centers, for example:
consulting hours,
service hours,
units produced.
If a cost center provides activities for other cost centers or projects, this means that the resources of this cost center are used and the resource costs must be allocated to the receivers of the activity. Activity types serve as tracing factors for this cost allocation.
Activity output quantities are measured in activity units such as hours, pieces, kilowatt-hours, for example. You can post plan activity unit quantities as well as post the actual consumed for a period.
Usually once a year you maintain activity type cost rates for cost centers. That is, how much the cost center charges per activity unit provided. For example, the IT department charges €100 for each hour of service.