What is allocation category in SAP CO-OM-ABC - Activity-Based Costing?

SAP Term: allocation category

• Component: CO-OM-ABC

• Component Name: Activity-Based Costing

• Description: An indicator that determines how activity quantities are planned and allocated. There are the following allocation categories: Allocation category 1 manual entry, manual allocation Allocation category 2 indirect determination, indirect allocation Allocation category 3 manual entry, indirect allocation Allocation category 4 manual entry, no allocation

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• Key Concepts: 
  Allocation category is a term used in Activity-Based Costing (ABC) within the Controlling (CO) module of SAP. It is used to assign costs to cost objects, such as products or services. Allocation categories are used to define the criteria for allocating costs, such as the cost driver, cost element, and cost center. 
  
  How to use it: 
  In order to use allocation categories, you must first create them in the SAP system. This can be done by navigating to the CO-OM-ABC Activity-Based Costing menu and selecting the “Create Allocation Category” option. Once created, you can assign costs to cost objects using the allocation category. 
  
  Tips & Tricks: 
  When creating an allocation category, it is important to ensure that all of the necessary information is entered correctly. This includes the cost driver, cost element, and cost center. Additionally, it is important to ensure that the correct cost object is assigned to the allocation category. 
  
  Related Information: 
  For more information on allocation categories in SAP, please refer to the official SAP documentation on Activity-Based Costing (CO-OM-ABC). Additionally, there are many online resources available that provide detailed tutorials on how to use allocation categories in SAP.