Cost Center and Cost Element wise Variable and Fixed Planning
The blog is prepared for clarifying how system provides Fixed and Variable costs breakup from report. There are a lot of times client asks to define additional activities to distribute Variable and Fixed nature costs.
This breakup is available from SAP standard functionality and does not necessitate additional activity.
In below example a single activity of Setup Cost is taken for example where both Plan Fixed/ Variable and Actual Fixed/Variable rate calculation is explained. Kindly ignore GLs description as these description might not be realistic.
System breaks down Fixed and Variable based on Plan entered GL and Cost Center wise as shown below. This blog is divided into two portions Plan Fixed and Variable Price Calculation and Actual Fixed and Variable Price Calculation
Plan Fixed and Variable Price Calculation:
We have also mentioned Plan Activity and Capacity against the same Activity.
Now both the above costs will be segregated based on formula where Fixed Costs are divided with Plan Capacity and Variable Costs are divided by Plan Activity in order to calculate Plan Fixed and Plan Variable Prices. Breakup is prepared below for reference:
|GL Heads||Plan Fixed||Plan Variable||Plan Capacity||Plan Activity|
|Setup Fixed Cost||100,000||10000|
|Setup Variable Cost||50,000||10000|
Fixed Price Rate = (250000+100000)/10000
Variable Price Rate = (50000)/10000
Total Plan Price = 40
**In the above manner, we can obtain both Variable and Fixed Plan Rate as calculated by system shown below.
Until now we have Plan Prices calculated, moving forward system will calculate Actual Prices based on below basis.
Actual Fixed and Variable Price Calculation:
There are some actual postings made in system in order to allow the system to calculate actual prices.
Firstly, system will deduct all the Actual Fixed Costs posted in GLs which were planned to remain fixed. This cost equals to 400,000/=
Accordingly, Fixed rate will be calculated by dividing the 400,000 total with Actual Activity.
|GL Heads||Actual Fixed||Actual Variable||Actual Activity|
|Setup Fixed Cost||150,000|
|Setup Variable Cost||60,000||2,457.437|
Fixed Cost = (250000 + 150000) / 2,457.437
**Variable cost will be calculated as Total Cost minus Fixed Cost divided by Actual Activity
Variable Cost = (460000 – 400000) / 2,457.437
Total Cost = 187.186
**System taken Price Unit as 10, therefore multiplying above amount with 10 will match the above rates with system calculations.
Concluding the blog it can be said that segregating the costs into Variable and Fixed nature will no longer require any additional activity. It can be covered with SAP Standard Feature of Fixed and Variable Price Calculation using KSPI and KSII.