Hi..
Ifyou want to update the consumption of activities in the actual quantity structure and allocate the difference between the activity prices posted during the period
and the actual price at the end of the period to the material using material ledger closing(price determination), you must activate actual costing with option ‘2’.
If you only want to update the consumption of activities in the actual quantity structure, you must activate actual costing with option ‘1’.
If you activate actual costing with option ‘2’. you should skip the step 'revaluate actual prices' during period closing for Cost Object Controlling for preventing from applying actual price to material twice.
This setting is not related to "Price Transfer" and "Multiple Valuation" features.
This setting is only related to actual costing.