KP26-price planning

Hi all
In Kp26 when we plan for price planning we input Price(Fixed) & variable price for every activity type & cost center,What is its importance & how Costing people will calculate these prices.Please any body can throw light on this...
& also one more question how does this link Material master price.
Thanks
Sandeep

Hi sandeep,
To calculate manufacturing cost of material the following cost will be considered .
Production cost = material costAcitivity costover head cost,
To calculate Acitivity cost, system will use standard values from routing. The standard values are linked to activity type and  costcenter in costing tab of workcenter.
To calculate opeartion cost system will use  the price rate  defined at KP26 for each activity type.
letsay your total opeartion time = 100 hrs  and operation has one activity type,
if u define Activity price = 10 INR/ Hr .
The activity cost = 10*100 = 1000 INR.
when u do the standard cost estimate for finished material, the above production cost will be updated in current price coloum in  material master.
regards
pardeep

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