Cost elements: Nature of Expenditure Cost elements describe the origin (Source)of costs.

Primary cost elements are elements used in production that are procured from outside the company. Secondary cost elements are elements used in production that are produced within the company itself. You have to assign each cost center to this structure to portray (Show) your enterprise entirely Cost Center These are usually the same as the internal functional areas depicted (Show) in your company's organization chart. Cost centers can be set up based on functional requirements, allocation criteria, activities or services provided, geographic location and/or areas of responsibility. Active /Inactive Cost centers that are created or changed from within the standard hierarchy have the status Inactive, that is, they are not handled as account assignment objects in Management Accounting. The assignments can only be checked and the cost center released once the cost center is active. Reassignment of the cost center. If you want to assign a cost center to another hierarchical level, you can do this in the standard hierarchy maintenance by a simple reassignment of the cost center. Assignments of the organizational units You can change the assignments of the organizational units, company code, business area, or profit center during the course of a fiscal year only if the following conditions hold: • The currency of the new company code is the same as the currency of the old company code. • You have only posted planning data in the fiscal year. • The cost center is not assigned to a fixed asset, work center, or HR master Record. Cost center categories The cost center category is an indicator in the cost center master data, which specifies the category for the cost center. Examples include administration, production, or sales & distribution. You can use your own cost center categories, or use those supplied by SAP. Cost center categories enable (Allow) you to assign the

the object currency is taken from the company code. Cost Center Accounting: Master Data → Standard Hierarchy →Change → Column Configuration icon .same characteristics to similar cost centers. The local currency in company code 1000 is EUR. You can also use the cost center category for cost calculation. This is useful to prevent (Stop) production activities from being posted to administrative cost centers by mistake. where it controls what percentages of the overheads apply to that cost center category. Object currency in Cost Center Which currency does the cost center use? In this case. For Example. you can allow particular activity types only for particular cost centers.

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