Standard cost estimation along with departmental transfer

Question

Hi Friends,
I will like to have the overview of the
1. departmental transfer price.
2. CKM3N (i.e. material price analysis, what is the difference between activation and non activation of it.)
3. KB21N (Direct activity allocation)
What are their connection in estimating the standard price.

Answer 1

Hi Friend
1) Transfer prices
Transfer price is a price used to valuate the transfer of goods and service between profits centers. Precondition is that you have Material Ledger active
Legal View = Company Code
                                             Parallel  Valuation Approach
                                            /                       |                     \
                                    Group                Legal               Profit Center
-  If currency type 32, transfer price is active
-  Internal moves are always valued at procurement price
2) CKM3N
  Before you activate Material Ledger you would have the option of S or V Price control, however when you activate ML  you   can value Materials at "periodic unit price", this price takes into account all the transactions of a material in a period(i.e goods movements, procurement etc..) and then at the end of the period revaluates the Material with a new periodic unit price.
3) KB21N
Allocation in general means taking cost accumulated on one object and allocating it to another, usually a cost center.
Direct Activity Allocation is where you use transactions KB21 (KB21N) to manually allocation costs from the cost collector (e.g. Order) to a specific Cost Center. The activities can come from PS or from CATS Activity Recording. These activities are assigned to an order/wbs/network. And from there via the transaction KB21/KB21N they are allocated to a specific cost center.
I hope the above information helps.
Regards,
Declan