Master data in cost center accounting Controlling area S01000 S02000 S04000 . . . . . S02200 S04200 S02200 S04210 Internal allocations with secondary cost elements Electricity Internal allocations with secondary cost elements cost elements Primary S02200 cost elements Primary S04220 Water S02200 Gas Electricity costs Direct labor costs Water costs Indirect labor costs Cost elements: Cost elements document which costs were incurred. If they are indirect costs, they are posted to cost centers. Cost centers: Cost centers document, together with the posted costs, where the costs occurred. Cost center hierarchies: Cost center hierarchies allow you to plan, allocate, and analyze the costs for areas in the organization. Energy costs

The chart of accounts Cost accounting Chart of account 1 2 3 4 5 6 7 8 Financial accounting Cost accounts Financial accounting 1 2 3 4 5 6 7 8 9 Fixed assets and long- term capital Current assets and short- term capital Neutral expendit- ures and revenues Material assets primary cost elem. Transfer postings of financial acctg. imputed costs Distrib. Second- ary cost elem. Assess- ment Second- ary cost elem. Direct alloc. Order settlem. Stocks of semi- finished and products Revenues/ Inventory changes/ internal services Transfer postings from financial acctg Distrib. Clos- ing Cost accounting Overhead cost control Profit control The chart of accounts contains all accounts for financial accounting and all cost elememts for cost accounting. The primary cost elements and revenue elements in cost accounting relate directly to the income statement accounts in financial accounting. Any posting entries can thus be channeled realtime into cost accounting. Secondary cost elements are for cost accounting exclusively and are only maintained in that application.

The Cost Element Primary cost elements Material cost elements Overhead cost elem. Secondary cost elements Allocation cost elem. Assessment cst elem. Overhead rates Cost elements for job order settlements Revenue elements Revenue Account General ledger Sub-ledger accts (G/L) accounts Inc.statem. accts Bal.sheet accts Material accts Expense accts Asset accts Accounts for indirect posting Accts receivable e.g. reconcil- iation account A / P accounts Accounts payable Vendor 1111 $1,000 $1,000 Revenue accts Accounts for direct posting Security and e.g. bank acct loan accounts The expense accounts of financial accounting become primary cost elements in cost accounting. They must first exist as general ledger accounts in financial accounting before you can create the corresponding cost elements in cost accounting. Primary cost elements must always be assigned to a cost object, such as a cost center. The secondary are exclusively for internal allocations in cost accounting. They do not have corresponding G/L accounts in financial accounting. If you wish to report revenues in cost accounting, you must create them as revenue elements in cost accounting, as you do with the primary cost elements. Revenues must always be assigned to a revenue object, for example a customer order.

General ledger account and cost element Client 006 CAUS chart of accts CAUS chart of accts G / L acct. 400000 Cost elem. 400000 Company code 1000 Controlling area 1000 G / L acct. 400000 Cost elem. 400000 FI CO When you define your cost elements, you must distinguish between primary and secondary costs. You can only create a primary cost element if you have already created a general ledger account for it in financial accounting previously. Secondary cost elements are used solely in cost accounting and must not exist in financial accounting.

Overhead analysis sheet Cost element groups Overhead analysis sheet Personnel costs Raw mat. and aux. supplies Wage costs Salary costs : : 420000 430000 : : 421000 431000 : : 422000 432000 : : : : Cost elements can be combined into cost element groups. These groups are used to create an overhead allocation sheet where several cost elements are processed within one transaction, such as cost center planning and periodic allocations

The organizational unit cost center ABC Corp. S03000 S02000 Logistics S01100 Manage- ment S02100 S02200 S02300 S02400 W.house Energy Buildings Motor pool 1100 Manage- ment 2110 2210 1100 2110 Incoming goods insp. Electricity Admin. buildings 2220 1100 2120 Water W.house buildings Incoming warehouse 2230 1100 2130 Each cost center is assigned to a superior hierarchy area in its master record. The area represents a group of several cost centers. You can group areas into superior areas, forming a hierarchy of areas and cost centers (on the lowest level of the hierarchy). You can have any number of such hierarchies parallel to eachother. You must designate one hierarchy as the standard hierarchy. All cost centers you create must be assigned to one area in this standard hierarchy. This assures that all cost centers of the controlling area are combined within the standard hierarchy. Gas Prod. buildings Outgoing warehouse

Time-based data fields Cost center 4110 Valid from Jan.01. . . . through Dec.31 . . . Analysis period Person in charge Jan.01. . . . - Jun.30. . . . Smith Jul.01. . . . - Dec.31. . . . Chan The master data in cost center accounting is time-dependent. There are three types of master data: time-independent fields, such as hierarchy levels, are valid for the entire lifetime of the data and changes apply to the whole lifetime. year-dependent fields, such as cost center currency, cost element type, are valid for a fiscal year. They cannot be changed during the fiscal year. day-dependent data fields, such as the blocking indicator, can be changed whenever you wish.

Activity types S01000 S04000 Production ABC Corp. S04100 S04200 Service Production A 4110 Repair 4210 Production Plumber hours SF I hours 4120 4210 Production Electrician SF II hours