‘Direct Activity Allocation’—one of the ‘transaction-based postings’—is used to record activities performed by a cost center and to allocate simultaneously to ‘receiving cost CENTERS.’ You will use this ‘direct activity allocation’ only when you know the activity VOLUMES of both the sender and the receiver. If not known, then use the INDIRECT activity allocation at the period end.

You need to input the activity quantity, sender/receiver cost center and date to enable the SYSTEM to allocate the costs; the system will automatically determine the allocation cost element and the activity price (either the planned price or the actual price). The system multiplies the activity CONSUMED with that of the activity price to arrive at the allocated cost.

‘Direct Activity Allocation’—one of the ‘transaction-based postings’—is used to record activities performed by a cost center and to allocate simultaneously to ‘receiving cost centers.’ You will use this ‘direct activity allocation’ only when you know the activity volumes of both the sender and the receiver. If not known, then use the indirect activity allocation at the period end.

You need to input the activity quantity, sender/receiver cost center and date to enable the system to allocate the costs; the system will automatically determine the allocation cost element and the activity price (either the planned price or the actual price). The system multiplies the activity consumed with that of the activity price to arrive at the allocated cost.