Material ledger Conceptual doubt

Dear Guru's,

I have one doubt regarding Activate Actual costing.

What is importance of these below fields.

0              No activity update

1              Activity update not relevant to price determination

2              Activity update relevant to price determination

     If we select "1" what is impact, means whether we have to do month end process at cost center or material ledger. What are the dependencies for this.

or If we select "2", where we have to month end process. in material ledger means where we have to our month end process.

Please explain process. i have read help document. but i am confusing my self.

Thanks,

AK.