Dear Nitisha
Through KP06 we plan the expenses at cost center level. This planning may be Activity dependent or activity independent.
Through KP26 we plan the activity quantity to be produced (or in easy language used) at the cost center.
When expenses are booked like Wags or power etc in FI at that time they come as debits to the cost centers as actual expenses. And when you confirm your order/operations at that time actual activity quantities are reflected in cost center.
Through KSII we divide Actual expenses booked by actual quantities booked. System fgroups the expenses for each activity based on planning GLs (If activity dependent planning) or through splitting structure (KSS4).
This all I have discussed earlier with some Madhu. You can check following string for detailed understanding.
http://scn.sap.com/thread/3411993
There is one more good document on understanding of expense analysis written by Mr. Maneesh. Link is given below
http://scn.sap.com/docs/DOC-46028
If you want further explanation please don't hesitate as we all are learners and knowledge increases by sharing.
Regards
Rajneesh Saxena