Business Process

[Former Member]

Dear experts,

Can any body explain how functionally we can use business process master in activity based costing? What is the difference between activity types & business process? As per the SAP definition business process can consume the multiple cost center outputs. How is it possible? If anybody working on business processes please give us a thought on it.

rajeswari

[Former Member · Accepted solution]

Hi

Activity-Based Costing provides helps assign overhead costs to products, customers, and other object in a way that is more correlated to cost drivers than traditional overhead allocation methods.

The resources consumed by Business Processes are assigned according to the true origins of the costs. The characteristic unit of measure for this assignment is known as the resource driver. Secondly, the business processes are assigned to the assorted receiver objects based on their actual utilization of resources. The assignment of business processes takes place via " process drivers", which represent reasonable measurements of business process consumption. Receiver objects can be products, customers, sales channels, and other types of profitability segment.

Activity types classify the activities produced in the cost centers within a controlling area.

A business process in a company enables the use of resources and can involve the activities of different departments to aid production.

I hope this helps.

Regards

Kavitha

[Former Member]

Dear Kavitha,

Thanks for the reply. Can you brief this with simple example?

Becaz we are using each cost centerwise no.of activity types. Can we use Business process instead of activity types? If yes, how can we use them?

Thanks

rajeswari

[Former Member]

Hi, Business process is also similar tolike Cost Center but it is created in another submodule Activity Based Costing. Hence, you need to activate ABC to use this Cost Object in addition to Cost Center. In ABC, we have very wonderful functionality of Template Allocation. Activity types are just a tracing factor which will be used both in ABC and CCA for allocation. Hence, the business process is not a subsitute for activity type. Let us know your business case so that we can support you. Trust this helps much! Cheers!

[Former Member]

Dear experts,

We are doing product campaign for a FG material. We have one service order like cleanout order (without output) which is having a settlement receiver Business process. After settling the clean out order we have to apportion the cost to other manufacturing orders in the campaign periodically. In this scenario , to apportion the cost in clean out order to manufacturing orders, how can we get basis of allocation automatically? Please help us.

rajeswari