Demystifying KP26: Activity Price Planning in SAP PP

In the complex SAP Production Planning (PP) world, ensuring accurate product costing requires a keen understanding of various functionalities. One such crucial transaction is KP26, often shrouded in mystery. But fret not; this blog will shed light on KP26 and its role in activity price planning within SAP PP.

Understanding the Why: The Power of KP26

KP26 serves two primary purposes in the grand scheme of product costing and cost center accounting:

1. Product Costing: When production is confirmed, the system debits the production order with conversion costs (like machine hour costs) based on the quantity used and the corresponding rate retrieved from KP26. This ensures the precise price of the finished product.
2. Cost Center Analysis: The cost center associated with a work center inherits the activity price defined in KP26. This data analyzes cost center variances (the difference between budgeted and actual costs). It helps identify areas of overspending or under-absorption within the cost center.

What Happens in KP26? A Peek Inside

Think of KP26 as the command center for defining planned activity levels for various activity types within specific cost centers. Here’s what you can do in KP26:

• Define Planned Activity: Specify the expected output (e.g., total labor hours) for a particular activity type within a chosen cost center for a specific period.
• Price Unit Selection: Choose the unit for the activity price (e.g., per hour, per day).

The Magic Behind the Scenes: The Power of Integration

KP26 doesn’t work in isolation. It integrates seamlessly with other functionalities to achieve a holistic costing picture:

• KP06 (Cost Element Planning): You plan all relevant costs associated with the activity type in the chosen cost center.
• KSPI (Plan Activity Price Calculation): This transaction divides the planned cost from KP06 by the planned activity from KP26 to arrive at the scheduled price per activity unit.

In Conclusion: KP26 – A Key Player in Cost Control

By effectively utilizing KP26, you can ensure accurate product costing, identify cost variances within cost centers, and gain better control over production expenses. So, the next time you delve into SAP PP costing, remember KP26 – your trusty companion in activity price planning!