Actual cost debits and credits occur throughout the month in different COST CENTERS throughout the company: production, overhead, and service cost centers. In order to provide accurate management reports by cost center and product line, companies allocate costs within company codes and often between company codes. Typically, these allocations are used to move overhead costs in overhead cost centers to other overhead cost centers and production cost centers. To perform this task, actual assessments and/or distributions are used to allocate actual costs at month end.
The difference between assessments and distributions is that distributions maintain the identity of the original cost. In other words, the primary cost element (source cost) is allocated to another cost center and posted to the same primary cost element. This allows you to see the original primary cost element in the receiving cost center, but doesn’t make it apparent that the cost was the result of an allocation.
Assessments use secondary cost elements in order to move costs. Secondary cost elements act as cost carriers and therefore, lose the identity of the primary cost element. You can choose to use assessments or distributions only, or use a mixed process.
The transactions for plan assessments and distributions discussed in Product Cost Planning are almost identical to the transactions for actual assessments and distributions. For more information on the differences between assessment and distributions, refer PRODUCT COST PLANNING.
Actual assessments are created in transaction KSU1 and executed in transaction KSU5 (see Figure 5.16 and Figure 5.17).
Figure 5.16: Create actual assessment cycle header data
Figure 5.17: Create actual assessment cycle segment header
Actual distributions are created in transaction KSV1 and executed in transaction KSV5 (see Figure 5.18 and Figure 5.19).
Figure 5.18: Create actual distribution cycle header data
Figure 5.19: Create actual distribution cycle segment header
After costs are allocated, it is important to review the cost center Actual/Plan/Variance report using transaction S_ALR_87013611. Using this report, ensure that allocations credited sending cost centers and debited receiver cost centers. The balance in a sending cost center should be $0.00 (or very close) if an entire cost center was allocated. A small rounding difference may remain as under/over absorption.
You can reverse assessments and distributions using the execute transactions (KSU5 or KSV5). The menu path to reverse an allocation is shown in Figure 5.20.
Figure 5.20: Reverse actual assessment cycle
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