Defining the Percentage Method

Use

The Percentage Method distinguishes between cross-controlling area data, which you maintain in an overhead structure, and controlling-area related data, such as base cost elements, overhead rates and credit objects.

The following section summarizes the most important steps for defining the percentage method. For more information on defining an overhead structure, see the Implementation Guide (IMG) for the Cost Center Accounting component under Controlling ® Overhead Cost Controlling ® Cost Center Accounting ® Planning ® Planning Aids ® Accrual Calculations ® Percentage Method and under Actual Postings ® Period-End Closing ® Accrual Calculations ® Percentage Method.

The following rules apply when you define the percentage method:

• To which base cost elements does the overhead apply? This information is stored in the base rows.
• Under which cost element is the overhead posted?
• How high is the overhead rate?
• Which credit object (cost center or internal order) is to be credited?

The overhead rows store the information for the latter three rules.

The structure, and the rules entered to calculate accrual, are very similar to those used in the Product Cost Controlling component (CO-PC). Therefore, you can also use this structure in accrual of costing-based costs.

The following example illustrates an overhead structure for accruals of vacation bonuses.

The accrual calculation for vacation bonuses can appear as follows:

 Row No. Costs Overhead Amount Row Type 010 Labor costs 200.000 Base row 020 Vacation bonus 10% on top of labor costs 20,000 Overhead row 030 Holiday bonus 10% on top of labor costs 20,000 Overhead row 040 Annual bonus 5% on top of labor costs 10,000 Overhead row

Actions

To define accrual cost calculation with the percentage method:

The overhead structure links all parts of the percentage method. It contains calculation bases, overhead rates, assignments, the accrual cost element, and the credit object.

You create the overhead structure during Customizing. You can maintain the data within by controlling area from the application component and from Customizing.

2. Determine assignments

You set the controlling area and the processing methods for which the overhead structure is valid.

When you maintain controlling area dependent data, the R/3 System offers only those overhead structures in which assignments exist for the corresponding controlling area.

You can define only one overhead structure per controlling area. If you require more structures in order to create different versions of accrual calculations, you can work with substructures.

3. Specifying calculation bases

The calculation base includes all the cost elements receiving overhead postings.

You must determine the validity period of the percentages serving as overhead rates. You must also assign a dependency to each overhead rate (see: Defining Custom Dependencies).

5. Determine credit/allocation

You use the credit key to define:

a) The accrual cost element used to apply the accrual amount allocated

b) the credit object ( cost center/ internal order)

Steps 1 and 2 refer to the overhead structure definition, meaning the framework. As a rule you define an overhead structure during Customizing of the R/3 System. Steps 3 through 5, however, belong to data maintenance for the structure, which is usually carried out in the application component.