Controlling Module: Operation Mite

Operation MiTE
Controlling Module
Consultant-SISL Core Team Process Owners

N.Balasubramanian P.S.Karanth R.L.Kamat
Ganesh Devle- Project Manager SISL R.Baglodi – Project Manager MCFL
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Operation MiTE
Table of Contents
CO 01 : Allocation of Cost to Cost Centers - Direct.......................................................................3
CO 02 : Assessment/Distribution of Costs to Cost Centers............................................................6
CO 03 : Direct Activity Allocations................................................................................................9
CO 04 : Assessment of Cost Center costs to Profitability Analysis.............................................12
CO 05 : Standard Cost Estimate....................................................................................................15
CO 06 : Actual Costs.....................................................................................................................19
CO 07 : Overheads.........................................................................................................................24
CO 08 : Actual Postings.................................................................................................................28
CO 09 : Allocation / Assessment of Costs / Revenues..................................................................31
CO 10 : Collection of costs on Internal Orders..............................................................................34
CO 11 : Budget Preparation & Budget Vs Actuals comparison....................................................38
CO 12 : Cost Audit Reports ..........................................................................................................45
CO 13 : Creating Reservation / Managing Commitments.............................................................47
CO 14 : Monthly Accounts............................................................................................................50
CO 15 : Profitability Analysis........................................................................................................54
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CO 01 : Allocation of Cost to Cost Centers - Direct

Module CO – Overhead Cost Controlling
Process Cost Center Accounting
Sub Process / No Allocation of Costs to Cost Centers-Direct CO-01
Description Cost Center Accounting lets you analyze the overhead costs according
to where they were incurred within the organization
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1.1 Requirements & Expectations
Dividing the organization into cost centers to follow several goals, depending on the
cost accounting method.
Assigning costs to cost centers to determine where costs are incurred within the
organization.
To plan costs at cost center level, to check cost efficiency at the point where costs are
incurred.
To assign overhead costs accurately to individual products, services, and market
segments, allocating the costs to those cost centers directly involved in the creation of
the products or services and further to assign the activities and costs to the relevant
products, services, and market segments.
Enabling valuation of semi-finished and finished products , and to calculate
contribution margins in Profitability Analysis
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2.1 Existing Process General Explanation
Major Departments are classified as Cost centers and all costs are allocated to cost
centers
2.2 Explanation of Existing Functions & Events – Flow Sheet

Direct costs go to the respective cost centers. Common overheads are allocated to
various cost centers based on direct costs/dispatch quantity /production
quantity/sales quantity etc.
2.3 Special Organizational Considerations
No special considerations.
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3.1 Proposed Process General Explanation
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All the expenditure items are treated as Cost elements and CO objects such as Cost
centre, Internal Order or Profitability Segment are assigned to the element of cost.
3.2 Explanation of Proposed Functions & Events – Flow Sheet
All departments created as Cost Centers. All expenditure items are treated as Cost
elements. All cost elements assigned to a cost center or Cost object. When a
transaction is entered in FI, the cost center or other CO object has to be given, so that
the cost gets posted to the concerned Cost center or object as the case may be.

Creation of additional Cost centers wherever necessary
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4.1 Changes Management Issues
Not Applicable
4.2 Description of Improvements

Unwanted cost centers eliminated ( like Capital work in progress) as these will be
dealt with through internal orders. Additional cost centers added, to make distribution
of costs more meaningful and accurate to the centers which is responsible for the
costs.
4.3 Description of Functional Deficits

Not Applicable
4.4 Approaches for covering Functional Deficit

Not Applicable
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5.1 Notes on Further Improvement
Nil
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6.1 System configuration considerations
nil
6.2 File conversion considerations (Master data maintenance).

Nil .
6.3 Interface considerations
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Not Applicable
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6.4 Reporting considerations
Cost center wise reports to be taken, cost element wise, periodically to analyse the
actual costs, to compare with the budgets and analyse the difference, if any.
6.5 Authorization considerations
Authorization for maintenance of masters must not be given to any user.
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CO 02 : Assessment/Distribution of Costs to Cost Centers

Sub Process / No Assessment/Distribution of Costs to Cost Centers CO 02
Description Allocation of costs collected on a cost center over a period to
individual cost centers based on pre-defined parameters.
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Distribution and assessment are used primarily for cost centers , where direct cost
allocation is not possible due to the variety of transactions, lack of clearly defined
individual activity types and the fact that the entry of the activity is too time-
consuming. For example, the costs of the company canteen may be assigned based on
the number of employees in each cost center. Telephone costs, especially the Board
Numbers of WO, HO are collected on a clearing cost center for each period. They are
then reposted or distributed at the end of the period according to the number of
telephone units or telephone installations in each cost center.
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Presently expenses like canteen, telephone etc are treated as overheads and allocated
based on the direct salary expenses of each cost center.

various cost centers based on direct salary costs/dispatch quantity /production
quantity/sales quantity etc.
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The costs like canteen, telephone, common repairs etc. will be distributed or assessed
to individual cost centers based on SKFs
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The expenses like Canteen, Telephone, common repairs etc. will first be collected in
an Allocation Cost Center . During month end, these are allocated to the individual
cost centers those have utilised these services in that office, based on the number of
employees or number of telephone instruments, floor area occupied etc, as the case
may in the individual cost centers .
Allocations are carried out at the period end (during period-end closing) and draw
upon predefined parameters (keys, sender-receiver relationships)
In Distribution, the original primary cost element is retained when allocated to the
receiving cost centers, for example, the telephone costs.
Allocation through assessment is useful when the composition of the costs is

unimportant for the receiver. For example, the assessment of canteen costs to a cost
center need not be broken down further.
In Assessment, the original cost elements are assigned cumulatively, or in groups, to

assessment (secondary) cost elements. The original cost elements are not recorded on
the receivers.
Sender and receiver information (sender cost center, receiver cost center) appears in
the Controlling (CO) document.

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Not Applicable

The allocation to cost centers will be made as accurately as possible based on the
utilisation of the services through SKFs

Not Applicable

Not Applicable
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Nil
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Nil

Nil .

Not Applicable

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CO 03 : Direct Activity Allocations

Sub Process / No Direct Activity Allocations CO-03
Description Direct activity allocation involves the measuring, recording, and
allocating of business services performed. i.e. Allocation of the costs
for the services rendered by the cost center to the products.
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Direct labour costs from Production Cost Centres, Maintenance cost centers, Quality
cost centers have to be allocated to the product as part of the cost of production.
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Presently direct costs are treated as fixed costs and allocated full to the cost of
production irrespective of the quantities produced. All the costs relating to the
production cost center are charged to the respective production cost center. Cost
center wise report will show the break up of costs.

various cost centers based on direct salary costs/dispatch quantity /production
quantity/sales quantity etc..
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Activity Types are created as tracing factors (allocation bases which can be used as
cost drivers) for the services of each cost center. Activity allocation occurs, for
example, when business transactions are confirmed or when posting activity quantities
to accounts. The system multiplies the activity produced by the price of the activity
type
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cost drivers) for the services of each cost center.
Activity Prices are calculated manually, based on the total costs of the cost center
charged in the previous month and the total hours of services (capacity) of that cost
center – say Production Cost center or Maintenance cost center. ( Total costs divided
by the total hours will give the price as Rs. Per hour)
The Business transacations will contain the number of hours (or minutes) of service
utilised by the Production order (or maintenance order, as the case may be) for the
particular production process ( or maintenance activity).
The time multiplied by the price will be the total labour cost of production which will
be charged to the Production order and credited to the Cost center.

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The allocations will be based on actual number of instruments, or actual number of
employees etc. These are called Statistical Key figures. The actual SKFs for the
month have to be entered before allocations are carried out.
The allocation of cost to products can be made as accurately as possible. After
crediting the actual activity prices, the balances in the cost center ( if any) will indicate
under absorption or over absorption, if any, which can be treated as per requirements –
i.e. Can be assessesed to the profitability segments in PA

Not Applicable

Not Applicable
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Nil
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Nil

Nil .

Not Applicable

Cost center wise reports to be taken, cost element wise, periodically to analyse

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CO 04 : Assessment of Cost Center costs to Profitability Analysis

Sub Process / No Assessment of Cost Center costs to Profitability CO-04
Analysis
Description Transfer of cost center costs which are not directly attributable to the
production process to any profitability segments
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To transfer other costs in Cost centers including under absorption / over absorption in
production cost centers which are not directly attributable to the production process to
any profitability segments
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Presently there is no Profitability Analylsis and all the costs in the cost centers are
treated as costs of production /overheads as the case may be.

various cost centers based on direct salary costs /dispatch quantity /production
quantity/sales quantity etc.. All the above are treated as the cost of production of a
product.
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cost drivers) for the services of each cost center. Activity allocation occurs, for
example, when business transactions are confirmed or when posting activity quantities
to accounts. The system multiplies the activity produced by the price of the activity
type. After allocating the production costs, whatever remains in the Cost centers are
under absorption / over absorption. Also there may be costs in certain cost centers
which cannot be directly allocated to the production process. Such costs are assessed
to the Product or to any of the segments in Profitability Analysis.
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cost drivers) for the services of each cost center.
Activity Prices are calculated manually, based on the total costs of the cost center
charged in the previous month and the total hours of services (capacity) of that cost
center – say Production Cost center or Maintenance cost center. ( Total costs divided
by the total hours will give the price as Rs. Per hour)
The Business transacations will contain the number of hours (or minutes) of service
utilised by the Production order (or maintenance order, as the case may be) for the
particular production process ( or maintenance activity).
The time multiplied by the price will be the total labour cost of production which will
be charged to the Production order and credited to the Cost center.
The balances in the cost centers after the above credit, if any, are treated as under
absorption and this is transferred to the Profitability segments or products in PA.
Cost center costs are always transferred to one profitability segment:
Production cost centers
These cost centers are first credited during production as the activities they perform
(such as machine hours and assembly hours) are required. The amount of the credit is
based on the quantities confirmed by production and on the activity prices (such as
machine hour rates) usually calculated in cost center planning. The balances that are
thus achieved - or the over absorption / under absorption remaining for the production
cost centers due to the difference between credits and actual costs - are transferred en
bloc in periodic profit analysis to those profitability segments in CO-PA that caused
those costs.
Sales and administration cost centers
Costs from administrative cost centers are transferred to CO-PA en bloc instead of
allocating them to cost objects. This reduces the period results of the individual
divisions, product groups, or business areas.

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Not Applicable

The allocation of cost to products can be made as accurately as possible.
Through assessment to PA, un-allocable costs can be assigned to the level that best
reflects the cause of the overhead. For example, the costs that arose in the marketing
for a certain customer group can be assigned to that particular customer group in CO-
PA.The fixed costs and the excess costs in production should be assigned to the
products or product groups that caused these costs so that these costs are analyzed
easily in reports by drilling down.

Not Applicable

Not Applicable
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Nil
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Nil

Nil .

Not Applicable

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CO 05 : Standard Cost Estimate

Module Product Costing
Process Product Cost Planning
Sub Process / No Standard Cost Estimate CO-05
Description To determine the cost of goods manufactured and cost of goods sold –
create an estimate of standard cost
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To create a standard cost estimate and use the same for standard costing.
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Presently there is no standard costing.

Not applicable

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Product Cost Planning (CO-PC-PCP) is an area within Product Cost Controlling (CO-
PC) in which we can plan the non order-related costs of, and determine prices for,
materials and other cost accounting objects. It helps to ascertain
What is the amount of value added of a particular step in the production process?
How high are the material, production and overhead costs?
Can the product be supplied at a competitive price?
Product Cost Planning calculates the cost of goods manufactured (COGM) and cost
of goods sold (COGS) for products such as materials and services. The costs may then
be analyzed and business decisions (such as "make or buy" decisions) made.
The cost of goods manufactured is composed of material and production costs,
process costs and overhead (such as material and production overhead). The cost of
goods sold consists of the cost of goods manufactured together with sales and
administration overhead costs.
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Create a Costing Variant which gives the purpose of cost estimate, period of validity,
Valuation methods for valuating raw material, labour costs, external services,
overheads etc.
The material costs for a material are calculated using the BOM and the master
records of the materials in the BOM. The production costs are calculated using the
routing, the work centers where the respective operations are carried out, the cost
centers, and the activity types. We can calculate overhead using the material costs and
the production costs as a base.
In the case of MCFL, being a Process Industry, the terms used will be Material Lists
Master Recipe and Resources .
The material list assigned to the master recipe contains the information pertaining to
the material components used. The phase overview details the work required to
manufacture the product and the default values. The resource is the organizational unit
at which an operation or phase is carried out. It also specifies a cost center
First, the system determines the quantity structure, being the BOM and routing. It then
valuates the materials in the BOM and the production activities from the routing with
prices and calculates the overhead.
The material costs are calculated for the material components, by multiplying a price
from the material master record, by the input quantity from the BOM. For materials
not included in inventory (that is, non-stock materials), the unit price is entered in the
BOM itself,
The costs of activity for producing, as contained in the master recipe is calculated
based on the formula and the performance efficiency rate key in the work center , the
standard values for the operation in the routing , the prices for the activity types in
Cost Center Accounting
Overhead costs are costs which can only indirectly be attributed to the product, such as
electricity or general storage costs. Overhead is applied to the reference object as a
percentage rate or a quantity-based rate. The overhead is applied by means of costing
sheet

The cost estimate with quantity structure presupposes that a bill of materials and a
master recipe (PP-PI) exist for the material to be costed
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The finished products are valuated with the Standard Cost Estimate which is stored in
the Material Master for the product.
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The allocation of costs to products can be made as accurately as possible. Defining
the cost components and itemization, cost element wise facilitates quicker compilation
of the Cost Audit Report formats and statements.

Not Applicable

Not Applicable
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Nil
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Nil

Nil .

Not Applicable

As per cost audit new format.

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CO 06 : Actual Costs
Module CO – Product Cost Controlling
Process Cost Object Controlling
Sub Process / No Actual Costs CO-06
Description To determine the cost of goods manufactured and cost of goods sold –
actual costs.
The Cost Object Controlling component enables determination of the
cost of goods manufactured or the cost of goods sold for the
manufacturing or service output of the company.
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To determine "What costs have been incurred for which objects?" Assign the costs
incurred in the company to the company’s output to determine the cost of goods
manufactured in all plants.
The Cost Object Controlling component enables to determine the cost of goods
manufactured or the cost of goods sold for the manufacturing or service output of the
company.
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Presently all direct costs are collected in Cost centers and all the costs in the cost
centers are treated as costs of production . Overheads are allocated manually outside
the system.

product.
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Cost object controlling helps to
Establish planned costs (budgeted costs)
Record actual costs for the cost objects
Compare actual costs with target costs and with planned costs, and analyze
variances
Determine price floors for products or individual orders
Cost Object Controlling supplies basic information for the following business
functions:
Price setting and general price policy
Inventory valuation
Cost of goods manufactured
Profitability analysis
Profit Center Accounting
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In Product Cost Planning, first create a standard cost estimate for the material to
establish the standard cost.
Then the following sequence of steps is performed in Cost Object Controlling:
1. Preliminary costing
The preliminary cost estimate calculates the planned cost for the object being
costed. For example, if the cost object is a production order, planned costs can
be used in variance calculation as the basis for calculating target costs.
2. Simultaneous costing
All actual costs incurred for a cost object are collected directly on the cost
object. Actual costs are incurred in different ways, such as through internal
activity allocations and material withdrawals. This process of collecting actual
costs on a cost object is called simultaneous costing. Simultaneous costing
enables you to view and analyze the actual costs on a cost object at any time.
3. Final costing
Once the cost object has been produced, final costing determines the actual
costs incurred during the production process. Final costing also serves the
purposes of cost analysis and control.
Final costing is normally performed as a period-end closing process. For this
reason, final costing in the R/3 System is one of the menu options under
Period-End Closing.
The period-end closing process includes the capture of period costs. A period
cost is an actual cost that is not attributable to the cost object from a particular
activity. This can be the revaluation of activities at actual prices or the
calculation of process costs or overhead, for example.
In addition, the period-end closing process can determine the value of the
unfinished goods (work in process).
Variances are calculated in the period-end closing process in Product cost by
Period.
While settling, data can be transferred to other application components such as
Financial Accounting.
Period-end closing in Cost Object Controlling is performed after period-end
closing in Cost Center Accounting.
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All postings of actual data that refer to a cost object result in an immediate debit of the
cost object.
The closing activities at the end of the period allow you to do the following:
Revaluate activities at actual prices
Allocate overhead using template allocation and by defining overhead rates for
cost objects
Determine the work in process (the value of unfinished goods)
Determine the variances between target costs and actual costs
Transfer the calculated data to other objects and application components
Compile periodic reports on a regular basis
Reporting functions are supported by the Cost Object Controlling Information
System.
In the R/3 System, you can analyze planned costs, target costs, actual costs, and
quantity information at various levels, such as that of the plant, product group, or
individual cost objects. The data are always available in real time.
Drilldown capabilities enable you to access detailed information.

Before you use the Cost Object Controlling ( establish the planned (budgeted) costs
for each product in a cost estimate. (Standard Cost Estimate)
Master data and transaction data in Production Planning - Process Industries (PP-
PI), Materials Management (MM), Sales and Distribution (SD), and Overhead Cost
Controlling (CO-OM).
Data in Cost object controlling can be transferred to
Profitability Analysis (CO-PA) to analyze the costs by market segment
Profit Center Accounting (EC-PCA) to analyze the results by profit center
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Not Applicable

The allocation to cost to products can be made as accurately as possible.

Not Applicable
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Not Applicable
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Nil
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Nil
Nil .

Not Applicable

As per cost audit new format

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CO 07 : Overheads
Module CO – Product Cost Controlling
Process Cost Object Controlling
Sub Process / No Overheads CO-07
Description Allocate overheads using percentage-based or quantity-based overhead
rates for plan or actual data
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To allocate overheads to the products.
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Presently all direct costs are collected in Cost centers and all the costs in the cost
centers are treated as costs of production . Other overheads are allocated to Products
based on a costing sheet in which the overheads are grouped and allocated in
proportion to the direct salary costs / dispatch quantity /production quantity/sales
quantity etc.in each production cost center.

product.

None
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Overhead costs are costs which can only indirectly be attributed to the product, such as
electricity or general storage costs. In the conventional method, overhead is applied to
the reference object as a percentage rate or a quantity-based rate. The overhead is
applied by means of costing sheets.
Overhead is assigned from FI to the cost centers. The overhead costs are in turn
passed on from Cost Center Accounting to Product Cost Controlling (CO-PC). From
Cost Object Controlling, the overheads are transferred to
Financial Accounting (FI), to valuate finished and unfinished products
Profit Center Accounting (EC-PCA)
Profitability Analysis (CO-PA)
Overhead costs that have not been applied to a cost object (such as sales and
marketing costs) can be passed on directly from Cost Center Accounting to
Profitability Analysis.
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Costing Sheet
Calculation Base : This defines the primary cost elements to which a particular
overhead is to be applied. This represents a group of cost elements to which
overhead has to be applied.
Overhead : The overhead rate determines to what extent the percentage-based or
quantity-based overhead rate should be applied to the direct costs. It also specifies
under which conditions (dependencies) the overhead rate is to be applied.
Credit: A credit specifies the credit object and the credit cost element. If an object in
actual data is debited with overhead, then another object (such as, a cost center, or
order) is credited at the same time using a special overhead cost element (category
41).
Costing Sheet comprises multiple rows that are processed from top to bottom during
the overhead calculation.
Base Rows : You define these by assigning a calculation base, so that they contain
the direct costs that are to have overhead applied to them during the overhead costing.
Overhead Rows : These are defined by the assignment of an overhead rate. An
overhead row consists of a base row or a totals row. The overhead amount is
calculated by multiplying the amount contained in these rows by the overhead
percentage rate or quantity-based overhead rate determined through the overhead
rates. As well as overheads, the overhead rows contain credit keys. These credit keys
determine which object (such as a cost center or order) is to be credited under which
cost element during overhead rate determination.
Totals Rows : Totals rows are used to generate subtotals or final totals
Applying Overheads: Enter the costing sheet required for overhead costing in the
object (such as a cost center, business process, internal order, project or costing
reference object)

To make an Overhead costing you need to define control data during customizing and
include this in a costing sheet
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CO 08 : Actual Postings
Module EC-Profit Center Accounting
Process Profit Center Accounting
Sub Process / No Actual Postings CO-08
Description Posting Costs and Revenues to Profit Centers on line and determination
of Profit / Loss, profit center wise.
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To determine profits and losses by profit center. A profit center is a management-
oriented organizational unit used for internal controlling purposes. Dividing
company into profit centers to analyze areas of responsibility and to delegate
responsibility to decentralized units, thus treating them as "companies within the
company".
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Presently Area offices & each product which they deal with are treated as Profit
centers and budgets are allocated to each product to each area offices and actual costs
and revenues are compared.
Costs incurred in the respective area offices are debited to the profit center.

Products are transferred to Area offices at a price determined based on the
budgeted Maximum Retail price (including dealers margin as per notification)
reduced by budgeted marketing cost (including budgeted dealers margin,) both
Variable and allocated fixed cost to a each Area Offices to each product and the
primary freight cost incurred to each product with respect to each area office.
All the actual costs including notional cost such as 1) inventory carrying cost 2)
debtors carrying cost 3) net impact of interest on delayed payment charged and
collected during the period pertaining to each area office are considered and the net
profit or loss is ascertained against the budgeted transfer price per MT and in value.
Any particular month if there is any saving out of inventory carrying cost &
debtors carrying cost which is arrived against the budgeted levels to each area
office to each product is not considered as a negative cost to the actuals. The
inventory carrying cost & debtors carrying cost is arrived based on Internal Rate of
Return (IRR) which is predetermined presently which is 18%.
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To create product wise profit centers in each area office and analyse the profitability
and performance of the area offices product wise.
Profit centers cannot receive direct postings in the R/3 System. Instead, the data is
posted to other objects and passed on from there to a profit center in Profit Center
Accounting. This makes it possible to display the company’s results by profit center
based on the original postings and with no additional work.

All the postings in Financial Accounting, Materials Management, Asset Management
and Sales and Distribution and Controlling which affect profits are reflected in Profit
Center Accounting.
All profit-relevant business transactions are updated in the profit center hierarchy
according to G/L account at the same time they are processed in the original module of
the R/3 System.
All the flows of goods and services within the company are represented as deliveries
and transfers between profit centers.
The balances and balance changes of certain balance sheet accounts can also be
transferred to profit centers in realtime or periodically.
The plan and actual data, profit center wise is evaluated using the Reports in
Information System. . Because results are stored by G/L account, the data in PC can
be reconciled with the data in Financial Accounting at the cost element level. The
reports contained in the standard R/3 System represent a simple information system
for analyzing areas of responsibility. In addition, different tools are available to create
own reports to further meet the needs of the company
The essential difference between a profit center and a business area is that profit
centers are used for internal control, while business areas are more geared toward an
external viewpoint.
The profit center differs from a cost center in that cost centers merely represent the
units in which capacity costs arise, whereas the person in charge of the profit center is
responsible for its balance of costs and revenues.
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Not Applicable

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Nil
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Nil
Nil .

Not Applicable

Profit Centre Analysis - Month wise & Cumulative for a given period - Area wise,
Product wise & account code wise compared to the Approved Budget with reasons for
variance
a)Profit center review ( Ranking the area office performance product wise)
b)Area office-wise profit center Performance analysis-Urea ,Phospatic & IOP
c)Comparative CPT of Area Offices
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CO 09 : Allocation / Assessment of Costs / Revenues

Module EC - Profit Center Accounting
Process Profit Center Accounting
Sub Process / No Allocation / Assessment of Costs / Revenues CO-09
Description Posting of costs from service profit center or allocation profit center
through distribution or assessment in Profit Center Accounting.
Sr No Topics
To allocate the following to different profit centers, namely
Costs (assessment and/or distribution)
Revenues and sales deductions (assessment and/or distribution)
Balance sheet items (distribution)
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Presently Area offices & each product which they deal with are treated as Profit
centers and budgets are allocated to each product to each area offices and actual costs
and revenues are compared.
Costs incurred in the respective area offices are debited to the profit center.

Products are transferred to Area offices at a price determined based on the
budgeted Maximum Retail price (including dealers margin as per notification)
reduced by budgeted marketing cost (including budgeted dealers margin,) both
Variable and allocated fixed cost to a each Area Offices to each product and the
primary freight cost incurred to each product with respect to each area office.
All the actual costs including notional cost such as 1) inventory carrying cost 2)
debtors carrying cost 3) net impact of interest on delayed payment charged and
collected during the period pertaining to each area office are considered and the net
profit or loss is ascertained against the budgeted transfer price per MT and in value.
Any particular month if there is any saving out of inventory carrying cost &
debtors carrying cost which is arrived against the budgeted levels to each area
office to each product is not considered as a negative cost to the actuals. The
inventory carrying cost & debtors carrying cost is arrived based on Internal Rate of
Return (IRR) which is predetermined presently which is 18%.

To create product wise profit centers in each area office and analyse the profitbility
and performance of the area offices product wise.
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Profit centers cannot receive direct postings in the R/3 System. Instead, the data is
posted to other objects and passed on from there to a profit center in Profit Center
Accounting. This makes it possible to display the company’s results by profit center
based on the original postings and with no additional work.
In addition to direct postings, profit center wise, there may be service profit centers,
which provide service to more than one profit center, for which the costs are allocated
to individual profit centers based on assessment or distribution

All the postings in Financial Accounting, Materials Management, Asset Management
and Sales and Distribution and Controlling which affect profits are reflected in Profit
Center Accounting.
All profit-relevant business transactions are updated in the profit center hierarchy
according to G/L account at the same time they are processed in the original module of
the R/3 System.
All the flows of goods and services within the company are represented as deliveries
and transfers between profit centers.
The balances and balance changes of certain balance sheet accounts can also be
transferred to profit centers in realtime or periodically.
The postings in Service Profit centers or Allocation profit centers, if any , are allocated
through assessment or distribution to respective profit centers.
The essential difference between a profit center and a business area is that profit
centers are used for internal control, while business areas are more geared toward an
external viewpoint.
The profit center differs from a cost center in that cost centers merely represent the
units in which capacity costs arise, whereas the person in charge of the profit center is
responsible for its balance of costs and revenues.
Sr No Topics
Not Applicable


Not Applicable
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Operation MiTE
Sr No Topics
Not Applicable
Sr No Topics
Nil
Sr No Topics
Nil

Nil .

Not Applicable
Profit Centre Analysis - Month wise & Cumulative for a given period - Area wise,
Product wise & account code wise compared to the Approved Budget with reasons for
variance
a)Profit center review ( Ranking the area office performance product wise)
b)Area office-wise profit center Performance analysis-Urea ,Phospatic & IOP
c)Comparative CPT of Area Offices

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CO 10 : Collection of costs on Internal Orders

Module Controlling
Process Internal Orders
Sub Process / No Collection of costs on Internal Orders CO-10
Description To plan, collect, and settle the costs of internal jobs and tasks.
Sr No Topics
To plan, collect, and settle the costs of internal jobs and tasks, including costs of
special events / special jobs / for statistical analyses
Sr No Topics
Presently all the expenses are captured cost center wise.

Presently all the expenditure items are captured cost center wise. Plan and Actual
figures are compared.

Not Applicable
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Sr No Topics
Internal Orders can be created for a time-restricted operational job, or for long term
cost monitoring. If required, a statistical posting to internal orders can also be made,
to monitor costs from a different angle, as an alternative to doing so to a true object.
Internal order can be created for each individual job, to collect all costs incurred in
performing that job. These internal orders are often planned in several steps,
depending on the technical planning progress or on the progress of the work itself.
The actual costs collected on these internal orders can be allocated
Either in the month the costs were incurred, using the actual costs in this
month
Or after all the work for the order is completed
Long-term internal orders are most often used to allocate the costs incurred for
recurring deliveries and activities. They allow continuous monitoring of costs in more
detail than is possible using a cost center. The actual costs collected on long-term
internal orders are settled monthly. Such internal orders often remain valid for
several years. Some typical uses include Minor repairs, Maintenance of small
equipment, such as wiring, lighting fixtures, Individual vehicles from the company
fleet, operation of "administrative" equipment, such as photocopiers, telephone
systems, and so on
Statistical internal orders are typically used to evaluate costs that cannot be displayed
in detail either in Cost Element or Cost Center Accounting. These orders allow
evaluations from a viewpoint different to that used in Cost Center Accounting.
To achieve this, the debits for a cost center can receive an additional account
assignment on a statistical internal order. The amount then appears under the original
cost element, both on the cost center (cost effective) and the internal order (statistical).
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Sr No Topics
Internal Order is created ( Master data) defining the attributes such as the Purpose,
permitted business transactions, settlement rule etc.
Assign postings of primary costs directly to an internal order within Financial
Accounting (for example, for external services and deliveries).
The internal order is usually used as an interim collector of costs. When the job has
been completed, the costs are settled to one or more receivers (cost center, fixed asset,
profitability segment, and so on).
To be able to settle an order, a settlement rule is defined in each of the senders. This
settlement rule determines where the costs are to be settled to.
The costs collected on an internal order are settled Either to one cost center, one G/L
account, or one business process using one settlement cost element Or through a
comprehensive settlement to various receiver objects.
During settlement, some or all of the plan or actual costs incurred on an object are
allocated to one or more receivers. The system automatically generates offsetting
entries to credit the sender object. The debit postings assigned once to a sender object
remain in place, even after settlement to a receiver (and can therefore be displayed).
The costs settled are updated on the corresponding receiver object and displayed in
reporting.
Information on the status of internal orders can be obtained through reports to
control them effectively. There are several predefined standard reports available for
the Internal Orders component (CO-OM-OPA)
Order management within a company usually differentiates between sales-oriented
orders, and internal orders. Sales-oriented orders (production or sales orders) are
intended mainly for the logistical control of input factors and sales activities. Internal
orders are categorized as either:
Orders used only for monitoring objects in Cost Accounting (such as,
advertising or trade fair orders)
Productive orders that are value-added, that is, orders that can be capitalized
(such as in-house construction of an assembly line).
Internal order management is the most detailed operational level of cost and activity
accounting. It can be used for:
Cost monitoring, for example, where costs need to be looked at from object-
related aspects, unlike in Cost Element Accounting or Cost Center Accounting
Assisting decision-making, when you need to decide between in-house
production and external procurement
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Operation MiTE
Sr No Topics
Additionally the Order reference has to be keyed in wherever more than one cost
object is there, namely cost center and an internal order and the like.


Not Applicable

Not Applicable
Sr No Topics
Nil
Sr No Topics
Nil

Nil .

Not Applicable

Information on the status of internal orders can be obtained through reports to
control them effectively. There are several predefined standard reports available for
the Internal Orders component (CO-OM-OPA)

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CO 11 : Budget Preparation & Budget Vs Actuals comparison

Module Controlling
Process Cost Center Planning
Sub Process / No Budget Preparation & Budget Vs Actuals CO-11
comparison
Description Up loading Plan values and monitoring Actuals against Budgets
Sr No Topics
To prepare the annual, month wise, departmental wise, cost center wise revenue
budget & procurement budget (revenue purchase & capital items).
Product wise budget.
Variance analysis (Quantity,Rate & Production variances)
Compare the budget with the actuals to monitor the costs
Sr No Topics
Presently all the expenses are captured cost center wise.
Month wise Budgets are prepared by each department under each cost center
(section wise) to a cost element which are directly controlled by respective
department .
For eg. a) Personnel & administration departments prepare salary & administrative
budget based on requirement to a cost center for a different business area and
consolidate to the company as a whole to each element of cost.
b)Production department will prepare month wise production plan based on :
i.Urea :Based on Essential Commodity Act(ECA) allocation/Govt Policy
ii.Phospatic & ABC :Based on the requirement of Marketing department.
Raw Materials and Utilities cost are calculated based on Production,Specific
Consumption and Rates relating to required production.
c) Maintenance department prepare
a) the month wise consumption budget separately for stores consumption
through stores and directly (non stock item)
b) for repairs costs.
d) Purchase department prepare procurement budget (purchase target for revenue &
capital items) through material balancing ( considering the Closing balance +
consumption -Opening balance ) based on Production & utility department and
Maintenance department consumption target and capital addition plan and these
procurement budget is linked to Financial concurrence where we are monitoring the
utilization of budget.
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All the elements of cost are broadly classified as follows:-

1. Production and utilities cost
2. Conversion cost including Salary & Administrative cost which related to
production activity
3. Salary & Administrative cost not related to production & marketing
4. Salary & Administrative cost related to marketing.
5. Provisions
6. Financial charges
7. Depreciation
Prepare the product wise profitability (only to finished goods) -

Raw material & utilities other than CPP power directly identify to each
product
CPP & purchased power allocate based on consumption to each plant then
reallocate based on no. of units produced (different finished goods).
R&M, Stores consumption based on actuals to a plant then reallocate based
on no. of units produced (different finished goods).
Marketing variable based on actuals to a product.
Administration & Marketing Fixed cost allocate into Urea & Phosphatic in
79:21 then reallocate the Phosphatic cost in to DAP, 20:20:0 & 16:20:0
based on production and Marketing Quantity.
Financial expenditure allocate into Urea & Phosphatic in 60:40 then
reallocate the Phosphatic cost to DAP, 20:20:0 & 16:20:0 based on
production Quantity.
Depreciation which are identifiable to production plant take directly and
depreciation for assets associated to services centers are allocated to Urea
& Phosphatic in 79:21 then reallocate the Phosphatic cost to DAP,
20:20:0 & 16:20:0 based on production and Marketing Quantity.
Revenue is calculated based on best estimates ( Urea RPS, Freight subsidy,
GOI concession) & sales is based on Sales PMT as per price circular X Qty.
Budget for Trading activity -based on Area Office-wise,month-wise.
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Operation MiTE
variance analysis,
Quarterly variance analysis against departmental budget element wise
Monthly variance analysis against product budget element wise.
LATEST ESTIMATES (I.E..) - [ACTUAL + PROJECTION]
Preparation of Latest estimates (I.E..) - Product wise & Dept-wise
Comparison of LE with actual of Previous Year, Budget , Split period comparison
Projection for next two or more financial years
ANNUAL BUDGET
Preparation of HO budget
Preparation of HO budget - Deptwise
Administrative Cost - Dept. wise - Corporate Office
Administrative Cost - Dept. wise - Works Office
Consolidation of Annual Budget - WO,HO, Marketing budget including AO
Profit and Loss Account - Budget
Profit and Loss Account - Estimate
Profit and Loss Account - Budget Product Wise
Comparison of Budget with LE of Previous Year - product wise
Operating Statement - Summary
Operating Statement Summary - Product wise
Sales Realisation - Product Wise
Details of Production and Sales
Details of Operating and Other cost
Details of Marketing Cost
Assumptions
Cash Flow Projections
Sundry Debtors Collections
Subsidy Dues - plant wise
Stock Flow
Monthly Profit and Loss Account - Budget Product Wise
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Sr No Topics
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Cost center planning involves entering / uploading plan figures for Costs or
statistical key figures for a particular cost center and a particular planning period.
Variances are calculated when the actual costs are compared with the plan figures.
These variances serve as a signal to make the necessary changes to business
processes.
Cost center planning forms part of the overall business planning process, and is a
prerequisite for standard costing. The main characteristic of standard costing is that
values and quantities are planned for specified timeframes, independently of the
actual values from previous periods .
Integrated Planning in SAP, covering all aspects of Business Planning, like Sales
plan, production plan, and cost center planning shall be explored to cater to the
complete planning requirements of MCFL
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Sr No Topics
Planning primary costs involves entering/uploading those costs that arise from the
consumption of goods and services supplied to the organization from external (as
opposed to internal) sources. Primary costs include Labour costs, External services,
Material costs, Operating supplies, Accrual costs. The accrual costs either have
different values in CO than in FI (imputed interest or depreciation), or are incurred
at different times in CO than FI (special payments such as vacation bonuses, or
irregular costs, for example, repairs, annual turn around).
In primary cost planning, you can enter/upload costs and consumption quantities for
each cost center/cost element. This means that primary costs can be planned by
quantity, as well as by value.
Primary costs can be planned using different methods, namely, Manual primary cost
planning and Automatic primary cost planning
In addition to primary costs, secondary costs are often incurred during the
production of cost center activity. This is because a cost center must often take
activity from other cost centers to produce its own activity. Secondary costs on the
cost center result from internal allocations, such as activity allocations or
assessments.
To get meaningful periodic comparisons of plan and actual data, plan secondary
costs as well as primary costs.
Cost center budgeting provides a further method of planning in addition to primary
cost and secondary cost planning. This tool enables you to carry out a comparison
between actual postings and plan budgets. You can thus determine when the budget
is exceeded and carry out timely availability checks. You can create budgets
for a single cost center or for cost centers of a cost center group
You can see the budget data in a budget report. The budget report compares plan
data , commitment data, and actual data (resulting from actual postings) as well as
the allotted and available amounts
IN the proposed process, the budgets for primary costs prepared by respective
departments will be uploaded, cost center wise and cost element wise.
There can be different versions of plan figures based on latest estimate, optimistic
and pessimistic scenarios etc. as per the requirement of the company.
The following steps are generally carried out in business planning:Sales Planning,
Production Planning, Cost Center Planning, Product Cost Planning, Sales and Profit
Planning. The SAP R/3 System supports all five steps. In SAP Best Practices a
consistently integrated planning is implemented in which various business
activities can be planned separately and yet still be integrated to ensure consistency
and to realistically control group-wide planning. ..
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Operation MiTE
Sr No Topics
The present planning methods will be explained by MCFL module / department
wise, in detail. After a study of the same, the standard features in SAP for planning
will be explored to map the requirement. This will be done after the initial
configuration, including Profitability analysis is completed and value flows thereto
tested.
Sr No Topics
Not Applicable

With integerated planning in place, the whole planning and budgeting exercise will be
simplified and the company can create several versions. The area offices can enter
their respective plan figures which can then be integerated at the company level.

Not Applicable

Not Applicable
Sr No Topics
Nil
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Before planning the budget, create a budget profile during Customizing for Cost
Center Accounting or use an existing profile. The settings for the following are made,
Budgeting time frame, Decimal places, Scaling factor, Distribution Keys, Fiscal year
or period values

Nil .

Not Applicable
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Plan, Actual and Variance reports, cost center wise and cost element wise, Budget
availability, Plans in different versions, Latest estimate
Budget Vs Actual -Quarterly / monthly

Department Wise Summary Report - Works office
Plant Wise Report - Works Office
Department Wise Report - Works Office
Department Wise Summary Report - Corporate Office
Department Wise Report - Corporate Office

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CO 12 : Cost Audit Reports

Module Controlling
Process Cost Audit Reports
Sub Process / No Cost Audit Reports / FICC Reports CO-12
Description Cost Audit Reports / FICC Reports
Sr No Topics
To compile the Cost Audit Reports
Sr No Topics
Presently all the expenses are captured cost center wise. Based on the element wise
break up in each cost center the cost audit reports in the required format is compiled.
Sr No Topics
The automatic allocation of costs to cost centers and therefrom to the products will
make the compilation of the reports easy and faster.

The cost components will be created in line with the reporting requirements in Cost
Audit Report. When a cost estimate is saved, the product cost will have the break up
as per the cost component split.
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Sr No Topics
Not Applicable

The allocation to cost to products can be made as accurately as possible. The
compilation of the reports will be instant after the allocations are carried out in the
system.

Not Applicable

Not Applicable
Sr No Topics
Nil
Sr No Topics
Nil

Nil .

Not Applicable

Cost audit report formats as prescribed by the Statutory authorities are followed. Any
changes brought out subsequently is carried out.
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CO 13 : Creating Reservation / Managing Commitments

Process Commitments Management
Sub Process / No Creating Reservation / Managing Commitments CO-13
Description Commitment management facilitates early recording and analysis of
commitments, such as Contractual or scheduled commitment that is
not yet reflected in Financial Accounting but that will lead to actual
expenditures in the future, for their cost and financial effects.
Sr No Topics
Whenever an expenditure is proposed, the Finance department has to look into budget
availability and enter this expenditure so that it is reduced from the future budget
availability by creating a reservation even though the actual expenditure will be
incurred at a later date.
Sr No Topics
Proposals for Financial Sanction-indigenous & Imports Purchases
Verification of Proposals with respect to
1.Company’s procedures and policies.
2.Purchase Requisitions(PRs),Request to Stores(RTS) from the indenting dept.
3.Verifying QCS with quotations
4.Availability of budget sanction
5.Verification of account code given by originator

Presently, when an expenditure is proposed, the office note is sent to the Finance
department. The proposal is given unique “Financial sanction number" and forwarded
to appropriate authorities in finance for signing ,then forwarded to GM-M/SVP-W for
approval. F C. Number is recorded in the register manually against appropriate budget
head and reducing the balance available for future financial concurrence.

None
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Operation MiTE
Sr No Topics
Commitment Management Identifies costs that will be incurred in the future for
materials and services that have been requested or ordered. Commitments reserve
funds that will become costs at a future date.
Purchase orders or purchase requisitions lead to financial commitments with varying

degrees of obligation. Commitments reserve funds for costs that will be incurred at a
future date. Therefore, commitments must be included in funds monitoring.

Commitments Management portrays the cost side of the procurement process for MM
Purchasing. The costs incurred are assigned to business objects, such as orders, cost
centers, or projects. specify which object the costs are to be assigned to (for example,
purchase order costs). In this case, this is known as an Initial Account Assignment.
You can use Funds Commitments to reserve funds for costs you are fairly certain to
incur, but you cannot yet assign to a specific business transaction (such as, a purchase
order or a purchase requisition).
The commitment is reduced by business transactions (such as goods receipts) and
actual costs are incurred by the corresponding account assignment object. This
continues until, for example, the business transaction "Purchase order" is closed and
the purchase order commitment is reduced to zero.
At year-end closing, you can carry the open commitment values from purchase
requisitions, purchase orders and fund commitments forward to the first period of the
next fiscal year. You can select by account assignment object (order, cost center or
project). You can also process individual documents if required.

Sr No Topics
Not Applicable

Not Applicable
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Sr No Topics
Not Applicable
Sr No Topics
Sr No Topics

Nil .

Not Applicable

Cost center wise / Order wise reports can be taken, periodically to analyse the actual
costs, to compare with the budgets, commitments and balance availability

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Operation MiTE
CO 14 : Monthly Accounts
Module Controlling
Process Monthly Accounts
Sub Process / No Monthly Accounts CO-14
Description Monthly Accounts
Sr No Topics
To compile monthly accounts which consist of
i. Month wise, product wise profitability and group wise profitability such as
Phoshatic fertilizers, Traded goods, Manufactured goods, budgeted products
profitability , non budgeted products profitability.
ii. Product wise cost of production.
iii.Subsidy realisablity based on existing cost against the claim preferred ( against the
present notification)
iv. Cost Per Tonne analysis .
v. Comparing FICC with actual
vi. Comparing Budget with actual
Sr No Topics
Presently all the expenses are captured cost center wise. Based on the element wise
break up in each cost center the monthly reports in the required format is compiled.
Prepare the product wise profitability (only to finished goods) -
Raw material & utilities other than CPP power directly identify to each
product doing "itemisation".
CPP & purchased power allocate based on consumption to each plant then
reallocate based on no. of units produced (different finished goods).
R&M, Stores consumption based on actuals to a plant then reallocate based
on no. of units produced (different finished goods) and in case of
consumption in utility plant CPP to Urea, Water plant to Urea, IAT to DAP
, Bagging Plant for respective product
Marketing variable based on actuals to a product.
Administration & Marketing Fixed cost allocate into Urea & Phosphatic in
79:21 then reallocate the Phosphatic cost in to DAP, 20:20:0 & 16:20:0
based on production and Marketing Quantity.
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Operation MiTE
Financial expenditure allocate allocate into Urea & Phosphatic in 60:40

then reallocate the Phosphatic cost in to DAP, 20:20:0 & 16:20:0 based on
production Quantity.
Depreciation which are identifiable to production plant take directly and
depreciation for assets associated to services centers are allocated to Urea
& Phosphatic in 79:21 then reallocate the Phosphatic cost in to DAP,
20:20:0 & 16:20:0 based on production and Marketing Quantity.
Revenue is calculated based on best estimates ( Urea RPS, Freight subsidy,
GOI concession) & sales is based on Sales PMT as per price circular X Qty.

Works office prepare the product wise manufacturing cost
HO consolidate the WO information with HO and consolidated AO TB
Sr No Topics
The automatic allocation of costs to cost centers and therefrom to the products will
make the compilation of the reports easy and faster.
Explanation of Proposed Functions & Events – Flow Sheet

3.2
Sr No Topics
Not Applicable


Not Applicable
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Sr No Topics
Not Applicable
Sr No Topics
Nil
Sr Topics
No
Nil
Nil .

Not Applicable

Monthly financial Analysis
Reason for increase/decrease in PBIDT
Reasons for difference in sales variance in PBIDT analysis statement with Financial
statement
Sales Variance for cur yr.
Production Variance for cur yr.
Stock Adjustments Budget vs. Actual (cur yr.)
Foreign Exchange Report as of current yr.
Conversion cost & Marketing Expenditure - Budget Vs Actual
Reason for increase/decrease in PBIDT
Sales Variance for prv yr.
Production Variance for prv yr.
Stock Adjustments Actual (prv yr.) vs Actual (cur yr.)
Profitability Statement Cost vs finance
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Operation MiTE
Major current Assets and Liabilities

CPT Variance analysis - product wise
Variance Analysis - FICC vs Actual
FICC vs Actual FTM and CUM figures
Marketing finance - HO
Preparation of Profitability statement of Traded products, Granulated Fertilizers,
Consolidated statement
Forward monthly purchase of Traded products to Works Office-Fin for sales tax
purposes
Consolidation of TB 8 Area Offices-Month wise, Product wise, account code wise on
spread sheet
Consolidation of Cash Flow of 8 Area Offices - on spread sheet
Analysis of Marketing Budget VS Actual -Area Wise, Product wise & account code
wise with Consolidated Report
Analysis of Corporate Marketing Budget VS Actual - Product wise & account code
wise
All the reports required are listed out and dealt with separately, as Annexure.
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CO 15 : Profitability Analysis
Module Controlling
Process Profitability Analysis
Sub Process / No Profitability Analysis CO-15
Description Value flows to PA and Profitability Analysis Reports
Sr No Topics
To analyse profitability for the market segments comprising of Region, Customer
group and Products
Sr No Topics
Presently profit analysis is being made area office and product wise which are profit
centers.
Area offices are considered as Profit Centers and product wise profit details are
studied by way of comparison of actuals with budgets. Customer or Customer group
wise analysis is not done presently.
Sr No Topics
Profitability Analysis will be carried out for the market segments comprising of Area
Offices, Products and Customer groups
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Operation MiTE
Sr No Topics
The market segment comprising of Area office, Product and Customer group will
be considered as Profitability segement and for this combination the Revenues,
discounts / rebates, cost of production, variances and other overheads will be analysed
and contribution margin will be worked out.
The Area Offices, Products and Customer groups will be defined as Characteristics
and the Value Fields will be Revenue, Discount / Rebate, Material costs, salaries and
wages, other production costs, depreciation, insurance, roaylty if any, admin
overheads, sales and marketing overheads etc. The values will flow from the sales
(billing) document, order settlement, and other direct postings in MM and FI. The
under absorption / Over absorption, if any in any of the production cost center as also
the other administrative overheads in Corporate services cost centers will be assessed
to the appropriate segments in PA.

The Operating Concern will be MCFL, assigned to the Controlling Area MCFL of
Company Code MCFL.
Sr No Topics
There will be new dimension in Profitability analysis involving customer or customer
group. Other characteristics may also be added in course of time as per the company'
s
requirements

The information flows from the sales document and also directly from Finance and
Materials. The overheads will also flow from CO . The PA is a powerful tool for
analysis of profitability in various dimensions.

Not Applicable

Not Applicable
Sr No Topics
New characteristics can be defined in course of time when the market expands and
the profitability is market-driven.
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Operation MiTE
Sr Topics
No
Nil

Nil .

Not Applicable

The Profitability Analysis report giving contribution margin for the various
combination of the characteristics can be viewed every month.

! # "#

Controlling Module: Operation Mite

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Operation MiTE

Consultant-SISL Core Team Process Owners

Ganesh Devle- Project Manager SISL R.Baglodi – Project Manager MCFL

CO 01 : Allocation of Cost to Cost Centers - Direct

2.2 Explanation of Existing Functions & Events – Flow Sheet

3.3 Special Organizational Considerations

4.2 Description of Improvements

4.3 Description of Functional Deficits

4.4 Approaches for covering Functional Deficit

6.2 File conversion considerations (Master data maintenance).

6.3 Interface considerations

CO 02 : Assessment/Distribution of Costs to Cost Centers

2.2 Explanation of Existing Functions & Events – Flow Sheet

Allocation through assessment is useful when the composition of the costs is

In Assessment, the original cost elements are assigned cumulatively, or in groups, to

3.3 Special Organizational Considerations

4.2 Description of Improvements

4.3 Description of Functional Deficits

4.4 Approaches for covering Functional Deficit

6.2 File conversion considerations (Master data maintenance).

6.3 Interface considerations

6.4 Reporting considerations

CO 03 : Direct Activity Allocations

2.2 Explanation of Existing Functions & Events – Flow Sheet

3.3 Special Organizational Considerations

4.3 Description of Functional Deficits

4.4 Approaches for covering Functional Deficit

6.2 File conversion considerations (Master data maintenance).

6.3 Interface considerations

6.4 Reporting considerations

6.5 Authorization considerations

CO 04 : Assessment of Cost Center costs to Profitability Analysis

2.2 Explanation of Existing Functions & Events – Flow Sheet

Cost center costs are always transferred to one profitability segment:

Production cost centers

Sales and administration cost centers

3.3 Special Organizational Considerations

4.2 Description of Improvements

4.3 Description of Functional Deficits

4.4 Approaches for covering Functional Deficit

6.2 File conversion considerations (Master data maintenance).

6.3 Interface considerations

6.4 Reporting considerations

CO 05 : Standard Cost Estimate

2.2 Explanation of Existing Functions & Events – Flow Sheet

2.3 Special Organizational Considerations

3.3 Special Organizational Considerations

4.3 Description of Functional Deficits

4.4 Approaches for covering Functional Deficit

6.2 File conversion considerations (Master data maintenance).

6.3 Interface considerations

6.4 Reporting considerations

6.5 Authorization considerations

2.2 Explanation of Existing Functions & Events – Flow Sheet

3.3 Special Organizational Considerations

4.2 Description of Improvements

4.3 Description of Functional Deficits

6.3 Interface considerations

6.4 Reporting considerations

6.5 Authorization considerations

2.2 Explanation of Existing Functions & Events – Flow Sheet

2.3 Special Organizational Considerations

3.3 Special Organizational Considerations