Copying Plan Data
Planning data can be maintained from scratch or copied from previous year. Remember that both can also be done. Yes you can plan for the current budget using version 0 and copy previous year plan to a different version in the current fiscal year.
Transaction: Plan data can be copied using transaction KP97
After copying to the desired version, revaluation can be performed if needed. Revaluation will adjust the plan data based on the consumption and cost percentages defined in the customizing.
Transaction: KPUI: Define Revaluation
Transaction: KSPU: Execute plan revaluation
Activity Independent Cost Planning
In this step, you would load all your plan primary costs that are activity independent. For each cost center, you would plan the costs that doesn’t change by your activity output. These costs are considered to be fixed costs and are planned across costs center and cost elements. These costs can be planned by year and distributed to periods evenly or can be planned by period.
Transaction: KP06
These costs end up as debit postings in the cost centers.
Activity Dependent Cost Planning
In this step you would plan the costs that vary by activity output. For each cost center associated to activity, costs are planned by activity type and cost element. These costs are considered to be variable costs as they are activity dependent. Similar to the earlier step, cost can be planned by fiscal year or by period. This step uses the same transaction as before, but a different layout which includes activity type.
Transaction: KP06
Costs end up as debit postings in the cost centers
Ex: Consider electricity activity type in a utility cost center. You would plan the electricity bill payment costs and it is dependent on the electricity consumption. Such plan values are activity dependent and are planned across cost center, activity type and cost element.
Maintenance Costs
In case of actual costs, maintenance costs flow to cost centers from work orders, In case of plan this can be achieved through internal orders. One internal order has to be created for every valid receiver. This receiver cost center has to be maintained in the settlement rule.
Next step is to plan the maintenance hours by each Internal Order. Sender cost center will be the maintenance cost center and activity is planned across each Order.
Transaction: KPF6
Now plan maintenance costs should be maintained for each Order. These costs are posted to maintenance order apart of the labor hours. To understand the difference between the costs planned earlier and now, labor costs planned earlier are activity dependent costs that debit your order and the maintenance costs that are being planned in the current step are activity independent and will also debit your order.
- Overhead Costs
- ◦Costing sheet has to be maintained
- ◦Overhead rates has to be calculated and maintained
Transaction: KZZ2 – Maintain Overhead rate
Costing sheet created for overhead calculation has to be maintained in the order master data. Following information might help you in calculating planned overhead rate.
Planned Labor Overhead rate = (Planned Labor Overhead Cost in Maintenance Overhead Cost Center / Planned Maintenance labor costs)
Once the Overhead rate is maintained in the costing sheet, plan overhead calculation can be executed
Transaction: KGP4: Execute Overhead Calculation.
Last step is to run the settlement for the internal orders. In this process, all the costs residing in the Order are settled to cost centers (receivers maintained in the settlement rule).
Transaction: KO9G – Order Settlement
Plan Cost Center Activity
This step is important not only for planning, it is mandatory from actual stand point. The plan price maintained or calculated is the base for your material price determination during costing run. It is also a prerequisite to create a work order.
Plan activity is maintained in the sender cost center and activities are linked to the cost centers in this step. If the business is not willing to run plan reconciliation, then plan activity can be maintained manually else, after completing all the necessary steps for planning, plan reconciliation run would automatically populate the plan activity for each cost center. “Equivalence number” determines the ratio of the activity independent costs to be attributed to the activity during the activity plan price calculation.
Transaction: KP26
Activity Dependent Activity planning
In this step activity costs from sender cost centers are planned against receiver cost center and activity type. These costs are variable and activity/cost center relationship is linked between sender and receivers through this step.
Transaction: KP06
Costs end up debit posting in the receiver cost center/activity type and credit posting in the sender cost center/activity type.
For example electricity is utilized across multiple production areas and other areas in the plant. So electricity activity from utility cost center is distributed to the receivers (production costs centers, service costs centers and plant maintenance cost centers etc).
Activity Independent Activity planning
In this step activity costs from sender cost center are planned against receiver cost center. Later at activity plan price calculation, these activity independent costs are distributed to all activity types in the receiver cost center.
It could be confusion/difficult to differentiate all these planning steps. I had explained various options in planning costs, based on the client requirement, necessary steps can be chosen.
Transaction: KP26
Costs end up debit posting in the receiver cost center and credit posting in the sender cost center/activity type.
Assessment/Distribution Cycle
Plan assessment/distribution cycles has to be maintained for allocating costs between cost centers
Transaction: KSU7
Plan Reconciliation
In this step, any differences between sender cost centers and receiver cost center activities are adjusted/reconciled.
Transaction: KPSI
Cost Splitting
In this step all the costs in the cost center are distributed to the activity types based on the splitting structure maintained in the customizing.
Transaction: KSS4
Plan activity price calculation
Based on all the planning steps done earlier, plan activity price for the activities are calculated. After plan price calculation, KP26 transaction shows you the plan price. All the cost centers planned for COGS has to be completed absorbed and left with no balance.
Transaction: KSPI
Note: Due to the updated plan costs because of iterative calculations, you might reverse and re-run the assessment cycles and Orders. After executing assessments and order settlements, make sure to run the plan price calculation (transaction KSPI).
Key Points
- Activity type can be excluded from the plan price calculation by maintaining “003” as price indicator in activity master data.
- For an activity type in plan price calculation, variable price can be determined only using plan activity and variable costs, where as fixed price can be determined either using plan activity or capacity of the cost center and fixed costs.
Other planning tools that can be used in planning costs
- Periodic reposting
- Indirect activity allocation
FICO bites 