Setting up Automatic Activity Price Calculation

by Paul Ovigele

September 6, 2011

Paul Ovigele, Ovigele Consulting

In my previous blog “Let the system calculate Your Activity rates Automatically”, I discussed the options available for calculating activity rates in the system and the benefits that would arise from doing so.  I will expand further on the automatic calculation of activity rates, and highlight a few of the settings needed for calculating plan and actual activity rates using the system.

Activity type master: In the activity type master (transaction KL02) you need to set the ‘Price indicator’ to “1” (Plan price, automatically based on activity) in the ‘Allocation default values’ section in order that the plan prices are calculated automatically. This means that the cost center budget entered in transaction KP06 will be divided by the quantity entered in transaction KP26 when you run the plan price calculation in transaction KSPI. You need to set the ‘Act. Price indicator’ to “5” (Actual price, automatically based on activity) in the ‘Variance Values for Actual Allocation’ section in order that the actual prices are calculated automatically. This means that the actual costs posted a cost center will be divided by the actual quantity consumed in the cost center when you run the ‘Actual Price Calculation’ in transaction KSII. Note that both the plan and actual price calculation use the same splitting logic which was discussed in my previous blog.

Controlling Area settings: You can decide the method used to c alculate activity prices by setting the appropriate indicators in the Controlling Area settings. To do this go to transaction OKEV, highlight the appropriate version and double-click on the folder “Settings for each fiscal year”. Then double-click on the appropriate year and go to the tab “Price Calculation”. In the ‘Plan’ section, you can choose the method for calculation the price which can be “Periodic” (where the budget for each period is divided by the quantity of that period) or “Average” (where the budget for all the periods are divided by the quantity for all periods and the result is assigned to every period). In the ‘Actual’ section you also choose one of the above mentioned methods. In addition you need to specify whether you want the difference between the actual and plan price is updated in the same transaction that was originally posted or if it should be posted in a different transaction. You do this by selecting the relevant indicator in the “Revaluation” field.

For actual activity price calculation, the cost object that the cost center’s quantities have been consumed in can be revalued based on the “Revaluation” setting mentioned above. In order for the revaluation to take place however, you need to run a separate transaction for the cost object (after you have run the actual price calculation transaction KSII). This transaction will depend on the type of cost object that is being revalued. See the below table for the cost objects and their corresponding revaluation transactions.


Cost Object

Revaluation Transaction (Individual)

Revaluation Transaction (Collective)

Production Orders



Process Orders



Product Cost Collectors



QM Orders






Internal Orders


Note that if you use the Material Ledger to calculate actual costs of your materials, then you do not need to run the above revaluation transactions. Instead, you can set the ‘Activity Update Indicator’ to “2” (Activity update relevant to price determination) in the ‘Activate Actual Costing’ transaction (SPRO – > Controlling -> Product Cost Controlling -> Actual Costing/Material Ledger -> Actual Costing -> Activate Actual Costing). You would then also need to set up the general ledger account that the cost center will be credited with by going to transaction OBYC and entering the account in transaction key/general modification GBB/AUI.

For more infrormation on how to optimize your SAP Financials landscape, I've put together my top tips in the book 100 Things You Should Know About Financial Accounting with SAP  which is published by SAP Press.

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