What is predistribution of fixed costs in SAP CO - Controlling?

SAP Term: predistribution of fixed costs

• Component: CO

• Component Name: Controlling

• Description: The assignment of set plan values as actual values for activity types on the cost centers or business processes that planned the activity input. The distribution is proportional to the planned quantities for activity inputs. Predistribution of fixed costs ensures the following: That integrated activity planning takes the preparation activities of sender cost centers and business processes into account. This is necessary because their input was planned by other cost centers or business processes. That the senders cost centers or business processes providing the activities are not treated as the sources of preparation costs; rather, the receivers that plan activity inputs from the senders originate these costs.

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• Key Concepts: 
  Predistribution of fixed costs is a process in SAP Controlling (CO) that allows for the allocation of fixed costs to cost objects. This process is used to assign a portion of the total fixed costs to each cost object, based on predetermined criteria. This helps to ensure that the cost objects are charged with their fair share of the total fixed costs. 
  
  How to use it: 
  In order to use predistribution of fixed costs, you must first define the criteria for how the costs will be allocated. This can include factors such as the number of employees, the size of the cost object, or any other relevant criteria. Once the criteria have been defined, you can then enter the total fixed costs into SAP Controlling and assign them to each cost object according to the criteria. 
  
  Tips & Tricks: 
  When using predistribution of fixed costs, it is important to ensure that all cost objects are charged with their fair share of the total fixed costs. To do this, you should review your criteria regularly and adjust it as needed in order to ensure that all cost objects are being charged appropriately. 
  
  Related Information: 
  For more information on predistribution of fixed costs in SAP Controlling, please refer to SAP Help documentation or contact your local SAP support team.