Define Activity

Explanation

Use this activity to define the cost activities used within the system for running activity-based costing by site. This is mandatory for measuring activity-based costing (ABC). An activity is carrier of a cost from the cost center to a specific cost object. An activity generates costs only having been connected to a cost center via a specific cost driver. The consumption of activities is what drives the costs through the system. The activities are connected to activity cost drivers that will be connected throughout the system. When you register an activity, a corresponding cost bucket is created automatically.

Prerequisites

This activity has the following prerequisites:

• Sites must be defined.
• System-generated or user-defined activity cost drivers must be defined within the system.

System Effects

As a result of this activity:

• A cost bucket is created. The cost bucket ID will be the same as the activity ID.
• The activity can be connected to different cost centers. 
• Cost activities are used to carry costs from the cost center to the specific cost object.
• An activity generates costs only after having been connected to a cost center and connected to a cost template.

Pages

Cost Activity

Activity Diagrams

BDR Set Up Activity Costing Basic Data