Creation of Cost Center
Controlling provides information for management for decision-making.
If facilitates coordination, monitoring, and optimization of all processes in an organization.
The organizational unit within a controlling area that represents a defined location of cost incurrence is called Cost Center
Tcodes for Creation of Cost Center are
- Define Standard hierarchy - OKKP
- Creation of Cost Center - KS01
- Creation of Cost Element - KA01
Cost Elements Describe the origin of costs.
The cost element classifies the organization-valuated consumption of production factors within a controlling area.
Primary Cost Elements
Primary cost elements are used for direct posting and must be accompanied in GL a/cs in FI.
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Creation of Std. The hierarchy for Cost center
SPRO -> Controlling -> General controlling -> Organization -> Maintain Controlling Area
- Click Position and enter your controlling area
- Select your controlling area and click the details button.
- Enter the field Cost Ctr. Std Hierarchy with some hierarchy name.
- Click the save button.
Creation of Cost center
SPRO -> Controlling -> Cost center Accounting -> Master data -> Cost center -> Create Cost center
- Set Controlling Area to our controlling area.
- [On menu bar -> Extras -> Set Controlling Area]
- Enter Name, Description, Person responsible, Cost Center Category as F for production, Std. Hierarchy, Business Area as 0001, and Currency INR and click the save button.
Creation of Cost Element
SPRO -> Controlling -> Cost center Accounting -> Master data -> Cost Elements -> Create Cost element
Set Controlling Area to our controlling area.[On menu bar -> Extras -> Set Controlling Area]m
Enter Cost Element as 400000 and valid from date and in the basic data tab enter name and description and cost element category as 1 (1 for Primary cost/cost reducing revenue)
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