Dear Krishna
KSS is used for actual cost splitting and KSII is used to calculate actual activity price. As you may be aware that we can do two types of planning via KP06 namely activity dependent planning and other is activity independent planning.
In contrast to the activity dependent planning in activity independent planning plan your expenses without reference to the activity hence called independent planning. As a result total expenses planned for a Cost center is divided by number of activities assigned to that cost center and then the result activity cost will be divided by the activity individual quantity planned to arrive at the price. The same happens in case of actual cost also.
to avoid this situation (and some other requirement also) you create splitting structure and assign all unassigned cost to relevant Activity. Then when you calculate activity price it becomes same as activity dependent cost.
For example: You planned 2 activities to your production department LABOR and POWER through KP26 with quantities 10000 and 5000 respectively. At the time of KP06 you planned Rs 100000/- in different cost elements such as wages 40000 and energy charges 60000. But you did not give activity while planning in KP06.
Without splitting if you calculate price the the result will come as (Total cost/number of activities)/each activity quantity. 100000/2=50000/10000 for LABOR comes Rs 5/- and 50000/5000 for POWER comes Rs 10/-
But if in splitting structure you assigned wages cost element to your LABOR activity and energy charges to POWER activity and the calculate prices, the result will be 40000/10000=Rs 4/- and 60000/5000= Rs. 12/-
The same results you will get in actual price calculation also.
KSII is used to calculate actual activity prices on the cost centers. Actual prices are calculated by dividing actual cost booked to cost center through FI postings by actual activities confirmed by PP through confirmation of Production orders.
Hope above is clear. If any doubt you may freely ask.
Regards
Rajneesh Saxena