Method of internal cost allocation by which valuated activities from cost centers can be assigned to cost receivers in accordance with the cause of the cost.
Activities represent the output of a cost center (such as production hours or machine hours). These outputs are defined in the R/3 System with activity types. The activity types are valued with prices that are either manually specified by the user or calculated by the system automatically by means of iterative activity price calculation. To calculate iterative prices, the R/3 System divides the cost center planned costs assigned to the activity types by the planned activity (or capacity depending on how the System is set up).
In internal activity allocation, the activity produced by the cost center is multiplied by the activity price. The result is the cost to be allocated. The sender cost center is credited with this amount and the receiver object is debited accordingly.