Dear balaji
1) Cost Center
By assigning cost centers to organizational objects, you determine where costs incurred by the object are to be charged. The inheritance principle applies: If an organizational object is not assigned a cost center, the cost center assigned to the superior object applies.
An organizational object may also be assigned more than one cost center.
2) Product Costing
Product Cost Planning (CO-PC-PCP) is an area within Product Cost Controlling (CO-PC) in which you can plan the non order-related costs of, and determine prices for, materials and other cost accounting objects.
You can use Product Cost Planning to break down the costs of your company’s products, such as
for analysis purposes. You can analyze the costs in various ways, for example:
o What is the amount of value added of a particular step in the production process?
o What proportion of the value added can be attributed to a particular organizational unit?
o How are the primary costs and transfer prices broken down?
o How high are the material, production and overhead costs?
o How can production or construction be rationalized?
o Can the product be supplied at a competitive price?
thanks
G. Lakshmipathi
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