Method for calculating the prices of planned activities for cost center/ type combinations in an iterative process taking all activity exchanges between cost centers into account.

Iterative means that the primary costs are first divided by the planned activity/capacity and the resulting activity prices are used to value the activity inputs.

The values are calculated based on

- the planned activity of one activity type on a cost center

- or the capacity of an activity type on a cost center

The capacity is only used for fixed costs. The R/3 System divides the total planned costs (primary, secondary, activity-dependent, activity- independent) by the planned activity or capacity.

There are three methods for calculating activity prices:

- Periodic price

The costs incurred each period are
divided by the activities performed each period. This results in
different activity prices for each period. If strong fluctuations
in the variable costs occur between periods. A relatively high
activity price will be calculated for periods with low variable
costs and low price will be calculated for the activity input in
periods with high variable costs.

- Average price

With this method all receivers are
charged at the same rate irrespective of the period when the
activity was input. The total costs for all periods are divided by
the total activity for all periods of one activity type.

You should not use this method for
calculating actual prices, since in the individual periods (except
the last period) no values for calculating the actual prices
exist.

- Cumulative price

With this method the activity price
for one period is derived from the total costs up to and including
the current period divided by the total activity for one activity
type through to the current period.

This smoothes out fluctuations
between periods. All the activity exchanges for all periods are
revalued with the new activity price.

Unlike the average price method, the
cumulative price method can be for calculating actual prices since
the price calculation, the new price valuation and the adjustment
postings are all made in the current period.

Once the R/3 System has calculated
the prices for all activity types, the activity exchanges are all
revalued with the new prices.