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capturing different rates of activity types

Former Member
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Dear Experts

I have a question on the activity types defined for capturing the cost of internal activities. I want to know how to define (in concept and not in system) activity types. Let examine a case:

there are 6 work centers in which different personnel work in each of them. the range of the salary for the personnel in each work center is wide e.g. from 10$/hr to 50$/hr. The personnel are not fixed for specific projects and a person may work on several projects.

I define e.g. 5 activity types in a work center with rates of 14$/hr, 22$/hr, 30$/hr, 38$/hr, and 46$/hr, and I assign the activity type with the rate of 14$/hr to activity A but a person works on this activity with real salary rate of 50$/hr. In such a case, the actual cost of the personnel assigned to a activity differs significantly from the rate of the activity type assigned to that activity and hence the calculated costs of project are not true.

What should I do in such a case and what in the solution?

What are the differentiation measures for defining activity types to capture this difference between the salary rates of personnel?

Please give some suggestions and helps for this issue.

Thanks in advance

Accepted Solutions (0)

Answers (4)

Answers (4)

varshal_kachole3
Active Contributor
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Hi,

Please check if "BADI_ACT_PRICE_CK" helps you with your requirement.

This BADI is available as in SAP ECC 603 Release.

Hope it helps!

Thanks and Regards,

Varshal Kachole

Former Member
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Hi Nilesh and Varshal

thanks for your suggestions.

Regards

Former Member
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Hi Majid,

As mentioned by you there are six different work centres in your project. As each work centre is assigned to one cost center. I assume that there are six different cost centres.

Now see, rates are maintained by activity type and cost centre combination in KP26.You said you created five different activity type for five different rates(14,22,30,38,46 dollar/hr).

But on one activity you can give one activity type and work centre combination.

In order to cater your demand that on one activity different person can work whose rate will be different, you can use activity element to cater this scenario.You can refer below matrix for that.

You need to select correct activity type and work centres/cost centre combination for that.

Another solution which sounds quite simple will be to maintain the average rate in cost center and activity type combination so that your planned cost difference with actual not be much.

C1,C2--stands for different cost centre in work  centres. And A1,A2... stands for different activity type

Rate-->14 dollar /hr22 dollar/hr30 dollar/hr38 dollar/hr46 dollar/hr
Cost centre\Activity type-->A1A2A3A4A5
C11422303846
C21422303846
C31422303846
C41422303846
C51422303846
C61422303846
Former Member
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Hi Nilesh,

Thanks for your response. you are right and if I want to assign different personnel with different rates to do an activity I can use activity elements. Bu my question is that how can I restrict the occurrence of following situation:

one of the project managers have selected the (c2, a2) combination for an activity however he has assigned in reality a personnel with the rate of 45$/hr to do that activity. In this case, considering the (c2, a2) combination, a personnel with rate in the range of (18 - 26)$/hr should perform the activity while a personnel with rate of 45$/hr is doing the activity for which the correct combination for the assigned personnel is (c2, a4)!

How can I prevent the inconsistency between the selected (W.center, Act.type) and the personnel assigned in reality to do the job?

Could you suggest a solution for this issue? Can I solve this problem in the SAP system or it should be solved conceptually and logically for the project managers?

Regards

majid

Former Member
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Hi Majid,

One thing which can be done in this case is you create project by templates(need to create standard template).So that manual changes or assigning will be avoided.But guidelines need to followed of assigning the personnel as you said in above query.

In case if this kind of assignment is getting too much confusion, then I will suggest you better to go for average rate maintaining ,this will atleast reduce the difference in your planned cost.

Thanks

Nilesh

Paulo_Vitoriano
Active Contributor
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The accuracy of the planning cost sometime depends on the level of detail.  And level of detail depends on the information available at the time of planning.

You can use for example network activity elements instead of the network activity, and each of them can have own activity type from the same work center.

At the end your planned cost will never be the same as future actual cost and that always has a rational explanation.

Former Member
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Hi Maria and Paulo

What I understand is that I can not do any other thing except I should accept the big difference between the plan and actual costs due to the wrong assignment of activity types and persons to the activities. If not, please clarify my understanding about the issue.

Regards

MTerence
Active Contributor
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Hi Majid,

What you mean by real salary rate 50$/hr ???

To do the accurate cost of the person, you need to maintain the price accurately.

Why you are not maintaining the actual price of the employee ?

Regards

Terence

Former Member
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Hi Maria

At first, Thanks for your reply.

Let give some more details. Think that there are 10 personnel in the work center with the mentioned salary rates. The activity type assigned to activity A has the rate of 14$/hr but the person who is doing the task has a salary rate of 50$/hr. In such a case the calculated cost of activity for 10hr is (14$/hr * 10hr = 140$) while the true cost occurred is (50$/hr* 10hr = 500$).

I want to know how can I define the activity types (or any other suggestion) to capture the true cost occurred in the project with an acceptable accuracy.

Regards

MTerence
Active Contributor
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Hi Majid,

You should have a activity type for 50$/hr.

This should be maintained based on the job role. Labour / Contractor / Engineer / Supervisor / Superintendent / Manager - each should have a activity type with cost.

Regards

Terence

Former Member
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Hi Maria

Your are right and as in the original post, we have an activity type with the rate of 46$/hr. but the fact is that there is not a direct relationship between the job role and the salary of personnel. Also persons with the same job role may have salaries with big differences. hence a project manager may assign an activity type Engineer with 15$/hr to an activity while an engineer is working on that activity who has a salary 45$/hr. A big difference!

Regards

MTerence
Active Contributor
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Hi Majid,

If you are not gng to maintain correct cost. So this will not give the expected result.

When you are gng to use activity costing, then you should maintain correct data, else only hours should be considered for employee attendance, you should not expect correct cost through the confirmation.

But the possibility is by FI posting can be done if there is any variance in the cost.

Regards

Terence