You can use the following price calculationmethods in the plan and actual data:
Price calculation can be based on:
Period-based price
Average price
Cumulated price
The system divides the costs arising in each period by the activity. This can result in different prices in each period. If your fixed costs remain constant throughout the fiscal year but the activity quantities fluctuate, the activity input valuation uses a relatively high price in those periods with lower activity quantities (see period 2 in the example). An activity input in a period with a higher activity quantity is valuated with a relatively low price, because the fixed costs draw on the higher activity quantity (see period 1 in the example).
Example
Fixed costs |
Var. Costs |
Activity |
Periodic Activity price |
|
---|---|---|---|---|
Period 1 |
1,000 USD |
1,000 USD |
1000 hours |
2.00 USD/hr |
Period 2 |
1,000 USD |
100 USD |
100 hours |
11.00 USD/hr |
The activity receivers in period 2 are at a disadvantage compared with the activity receivers of period 1. The period-based price is higher in period 2 than in period 1, due to the lower activity quantity. The price in period 2 contains a higher proportion of fixed costs than the price in period 1. This is because the fixed costs in period 2 are related to a lower activity quantity. The variable unit cost, that is, the variable portion of the period-based price, is the same in both periods ($1/hour).
The average price is based on the total costs of all periods divided by the total activity quantity of an activity type for all periods. This ensures that the valuations of all activity inputs use the same price, regardless of period, for all receivers.
Example
Fixed costs |
Var. Costs |
Activity |
Activity price |
|
---|---|---|---|---|
Period 1, period |
1,200 USD |
1,000 USD |
1000 hours |
2.20 USD/hr |
Period 2, period |
1,000 USD |
100 USD |
100 hours |
1.00 USD/hr |
Average |
2,200 USD |
1,100 USD |
1,100 hours |
3300 USD ¸ 1100 hours = 3.00 USD/hr |
This method does not result in a complete crediting (clearing) of costs in the individual periods. This means:
Too much is credited (Period 1: Credited with $3,000 compared with $2,200)
Too little is credited (Period 2: Credited with $300 compared with $1,100)
You can only credit a cost center or business process completely by using the sum of all periods.
In cumulative price calculation the price for a period is based on the accumulated total costs and activities of all previous periods (entry in
To Period
). In this way, price calculation allows for cost fluctuations in the periods.
When you revaluate using a cumulated method, all the sender objects are completely credited in the periods that you specified in the period selection for the actual price determination. The activity inputs are valuated with the new price in each selected period. Clearing entries in these periods ensure that this equal valuation remains.
Note
The cumulative price calculation method requires that all activity receivers can be posted to in all periods of the specified time interval. This means that the period lock must not be active for these objects. This is to ensure that receivers in the first period can still receive clearing entries in the last period.
Caution
Unlike the average price, which you can also define for individual cost centers/activity types or business processes, the cumulative price can only be selected for all sender objects. This can be activated in the version setting (IMG under
).The cumulative method is especially useful if the costs and/or the activity quantities are subject to wide-ranging fluctuations. In particular, this would apply if the time of activity output is not identical to the time of the cost occurrence. Compared to average prices, which also ensure an even debiting of receivers, the advantage of cumulative prices is that the cost center or business process is fully credited at any given time. For average prices, this is true only for the entire period.
Periodically differentiated price: The costs of each period are divided by the activity of that period. The prices can vary greatly.
Period |
Periodic Costs |
Periodic Activity |
Periodic Price |
---|---|---|---|
1 |
1,000 USD |
100 hrs |
10 USD/hr |
2 |
2,000 USD |
50 hrs |
40 USD/hr |
3 |
1,000 USD |
250hrs |
4 USD/hr |
Cumulated Price: The price is always calculated using the total of the current and previous periods. The price in period two is, for example, calculated from the costs in periods one and two (1,000 USD + 2,000 USD), divided by the activity of this time period (100 + 50). The price fluctuations are smaller.
Period |
Cumulated Costs |
Cumulated Activity |
Cumulated Price |
---|---|---|---|
1 |
1,000 USD |
100 hrs |
10 USD/hr |
2 |
3,000 USD |
150 hrs |
20 USD/hr |
3 |
4,000 USD |
400 hrs |
10 USD/hr |
Activity allocations are valuated at actual prices for the revaluation. The difference to the values already posted are then allocated.
Enter a period interval for the actual price determination. The system then revaluates for each period. The sender objects are completely credited in each period.
If you only enter one period, the subsequent allocation is also only made in one period, and thus only this period is completely credited.
Period |
Activity |
Cumulated Actual prices |
Actual Costs (Actual Valuation) |
Plan Prices |
Actual Costs (Plan Valuation) |
---|---|---|---|---|---|
1 |
100 hrs |
10 USD/hr |
1,000 USD |
5 USD/hr. |
500 USD |
2 |
150 hrs |
20 USD/hr |
3,000 USD |
5 USD/hr. |
750 USD |
3 |
400 hrs |
10 USD/hr |
4,000 USD |
5 USD/hr. |
2,000 USD |
Period |
Difference Actual/Plan Valuation |
Revaluation |
---|---|---|
1 |
500 USD |
+500 USD |
2 |
2,250 USD (-500 USD Revaluation Period 1) |
+1,750 USD |
3 |
2,000 USD (2,250 USD Revaluation Periods 1 and 2) |
-250 USD |
Period 1:
The difference between the actual costs and the actual/plan prices is 500 USD. The receiver is debited with this amount – the sender objects are completely credited in period one.
Period 2:
The difference between the cumulated actual costs and the actual/plan prices is 2,250 USD. However, the receiver periods are only credited with 1,750 USD since the revaluation from period one (500 USD) can be deducted. Despite this, the sender objects are completely credited, since 1000 USD from the first period has already been allocated to the receivers.
Period 3:
The revaluation shows that the receivers were debited with 250 USD too much. This is credited to the receivers. The sender objects are thus correct and completely credited. How was this total calculated? The difference between the actual costs and the actual/plan prices is 2,000 USD. The revaluations from periods one and two totaled 2,250 USD, meaning that the receivers were debited with 250 USD too much.
If you only enter period three for the actual price determination, the system makes a correct allocation. However, only the senders in period three are completely credited. The price determination always posts in the period(s) entered in the
From/To Period
. 750 USD is revaluated because although the plan costs from periods one to three are included in the calculation (3,250 USD), there was no revaluation in periods one and two.
Period |
Act. Costs |
Activity |
Cumulated Actual prices |
Planned Costs |
Plan Prices |
---|---|---|---|---|---|
3 |
4,000 USD |
400 hrs |
10 USD/hr |
2,000 USD |
5 USD/hr |
Period |
Difference Plan/Actual Costs |
Revaluation |
---|---|---|
3 |
2,000 USD |
+750 USD |