Define and Allocate Costs

Cost allocations move costs and revenues between cost types, cost centers, and cost objects. You can define as many allocations as you need. Each allocation consists of:

• An allocation source.

• One or more allocation targets.

The allocation source establishes which costs must be allocated, and the allocation targets determine where the costs must be allocated. For example, an allocation source can be the costs for the Electricity and Heating cost type. You allocate all electricity and heating costs to three cost centers: Workshop, Production, and Sales. These cost centers are your allocation targets.

For each allocation source, you define an allocation level, a validity period, and a variant as grouping identifier. You can use a batch job to set filters to select allocation definitions and then run cost allocations automatically.

For each allocation target, you define an allocation base. The allocation base can be either static or dynamic.

• Static allocation bases are based on a definite value, such as square footage or an established allocation ratio, such as 5:2:4.

• Dynamic allocation bases depend on changeable values, such as the number of employees in a cost center or sales revenue of a cost object throughout a certain time period.

The following table describes a sequence of tasks, with links to the topics that describe them. These tasks are listed in the order in which they are generally performed.

See Also

Concepts

Set Up Cost Accounting
Transfer and Post Cost Entries
Manage Cost Accounting
Terminology in Cost Accounting
About Cost Accounting