Example: Target=Actual Activity AllocationThe administrative cost center 920 plans an output of 300 administrative hours. Administrative cost center 921 plans an input of 300 hours from cost center 920 and output of 500 administrative hours. Garage workshop cost center 122 plans input of 100 administrative hours from cost center 921 and output of 200 repair hours. Vehicle cost center 110 plans input of 400 administrative hours 921 and an activity output of 5000 kilometers. Planning has already been reconciled in plan reconciliation.
The vehicle cost center 110 produces actual activity of 6000 kilometers and the garage workshop produces 140 repair hours. This results in an
operating rate of 70% for the garage workshop and 120% for the vehicles.Due to the changed operating rate, the garage workshop draws 70 hours (70% of 100) from administrative cost center 921, while the motor pool draws 480 hours (120% of 400). The administrative cost center 921 must therefore produce 550 hours. This corresponds to an operating rate of 110%.
Due to the changed operating rate, cost center 921 must also raise its activity input from cost center 920 to 330 hours (110% of 300). Administrative cost center 920 must therefore produce 330 hours. This corresponds to an operating rate of 110%.