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Cost objects


What are the real cost objects ? How to capture the same viz., ?

What are the GL acounts/ Cost elements required for the same Viz., Cost of sale, Cogs ...

Thanks, Chitras


A distinction is made between Cost object and controlling object. I also came to know of this some time back. I was under the impression both refers to one and the same. But there is asubtle difference between these two.

Cost Objects

Cost objects are units to which costs can be assigned according to how they were caused using the functions of Cost Object Controlling.

The costs incurred in a company can be assigned to the following cost objects:

· Product cost collectors

You use product cost collectors in the Product Cost by Period component. You can use product cost collectors in make-to-stock production and in mass production on the basis of sales orders if you are using a valuated sales order stock in sales-order-related production.

See also: Product Cost Collectors in Sales-Order-Related Production

· Cost object hierarchies and their cost object nodes

You use cost object hierarchies in Product Cost by Period. You can use cost object hierarchies in make-to-stock production and in sales-order-related production if you are using a valuated sales order stock.

· Manufacturing orders (production orders or process orders)

If you are using manufacturing orders as cost objects, you normally use the functions of the Product Cost by Order component. You can use manufacturing orders as cost objects both in make-to-stock production and in sales-order-related production.

· Sales document items (items in inquiries, quotations, or sales orders) (see also: Sales Order Item That Carries Costs and Revenues)

If you are using a sales document item as a cost object, you use the functions of the Product Cost by Sales Order component.

· General cost objects

General cost objects can be used in the Costs for Intangible Goods and Services component.

· Projects and their WBS elements

· Networks

· Internal orders

Account assignment distinguishes between true and statistical Controlling objects.

True Controlling Objects

· Cost centers (for account assignment of costs)

· Orders (true)

· Projects (true)

· Networks

· Make-to-order sales orders

· Cost objects

· Profitability segments

· Real Estate Objects

· Business Processes

You can use true Controlling objects as senders or receivers.

Statistical Controlling Objects

· Cost centers (for account assignment of revenues)

· Cost centers, if a true account assignment object already exists

· Statistical Internal Orders

· Statistical projects

· Profit centers

You can indicate internal orders and projects in each master record as statistical.

You can also specify Statistical Controlling objects as account assignment objects in addition to true Controlling objects. You cannot allocate costs on statistical Controlling objects to other objects. Account assignments are for information purposes only. You can make statistical assignments to any number of Controlling objects.


Note the following rules for account assignments:

· You need to specify a true Controlling object in each posting item.

You cannot assign to a objects such as a statistical project without specifying a true Controlling object.

· In each posting item, you can specify up to three statistical Controlling objects in addition to the true Controlling object.

For example, you can post costs to a cost center and also to a statistical order and a statistical project.

· You cannot assign costs to more than Controlling object of the same type in one posting item.

For example, you cannot post to both a true order and a true project.

The only exception to this is that you can assign to a cost center and one other true Controlling object. In this case, the posting is true for the additional Controlling object and statistical for the cost center.

· You cannot specify the same Controlling object as being true and statistical in the same posting item.

You cannot post to an order and a statistical order in the same posting item.

· You can only make postings to profit centers in addition to true Controlling objects.

This means that costs and revenues are only posted statistically to profit centers. Profit centers are derived from true Controlling objects.

When you enter a profit center, it must match the profit center that is assigned from the Controlling object.

· You need to create P&L accounts as a cost element if you wish to post to them and a Controlling object.

· You can make true revenue postings to the following:

¡ A profitability segment

¡ A make-to-order sales order

¡ A project with revenues

¡ An order with revenues

¡ A real estate object

· You can only post revenues statistically to cost centers and profit centers.

If you specify a cost center or a profit center for a revenue posting, the system treats the object as a statistical Controlling object. This means that you must also specify a true Controlling object to which the revenues are posted.

The system can automatically derive such an object if account-based profitability analysis is not active. The system logs the posting under the object type reconciliation object. The reconciliation object is a summarized profitability segment with the characteristics company code, business area, plant, and profit center.

The system also updates a reconciliation object by cost element for postings to a profitability segment with costing-based profitability analysis.

The system does not post to reconciliation objects if you specify an additional Controlling object on which true revenue postings can be made.

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