Define Activity Cost Driver

Explanation

Use this activity to define new activity cost drivers for use by the system and to view system-generated drivers. This task, to be performed by a system administrator or equivalent person, is mandatory for activity-based costing.

Prerequisites

This activity has no specific prerequisites.

System Effects

As a result of this activity, user-defined activity cost drivers are created and are available for use in system-run activity-based costing.

Window

Activity Cost Drivers

Related Window Descriptions

Activity Cost Drivers

Procedure

  1. Open the Activity Cost Drivers window.
  2. To create a new activity cost driver, create a new record.
  3. In the Cost Activity Driver ID field, enter up to five alphanumeric characters for the cost activity driver ID.
  4. In the Description field, enter the description.
  5. To modify an existing activity cost driver, query for the activity cost driver ID.
  6. In the Cost Overhead Type field, select the overhead type to connect to the activity cost driver from the List of Values. This defines the posting type and event used for the overhead cost.
  7. To use a predefined cost driver as a source, select the source for the new cost driver from the List of Values in the Activity Driver Source field. Only sources that are connected to the overhead type are available.
  8. If you specified a source, select the percentage of the source's costs to be absorbed by the new cost driver from the List of Values in the Factor field.
  9. Save the changes.