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CO: Calculating Cumulated Activity Prices

Description

In previous releases it was possible to calculate a periodic activity price or an average price. In Release 3.0 you can calculate a cumulated activity price.

With this method, the periodic activity price is calculated by dividing the total costs for all periods to the current period by the total activity to the current period. All activity exchanges in all periods are valued with the new activity price. Clearing postings are made in the current period to ensure that the activities are all valued with the same price. This can mean that receivers are posted to in the current period, although they used activities from other cost centers in a previous period.

Unlike the average price, which can be selected for cost center/activity type combinations, the cumulated method can only be used on a version basis.

This method is best used when the costs and/or activity output fluctuates dramatically. This occurs if the activity output does not occur at the same time as the cost incurrence. With this method, the cost center is always fully relieved of costs. This only applies to the entire period when the average price method is used.

A condition for using this method is that all activity receivers can still be posted to in future periods. This is because receivers in the first period may receive clearing postings in the final period.

Change system parameters in customizing

Release 2.2 version maintenance included a parameter that determined whether periodic prices were used instead of average prices. This indicator is no longer used in Release 3.0. Instead, you decide in each version which pricing method you wish to use. There are 3 options:

• periodic activity price

• average activity price

• cumulated activity price