Organizational unit within a controlling area that represents a clearly delimited location where costs occur. You can make organizational divisions on the basis of functional, settlement-related, activity-related, spatial, and/or responsibility-related standpoints.

Cost centers are grouped together into decision, control, and responsibility units.

You use cost centers for differentiated assignment of overhead costs to organizational activities, based on utilization of the relevant areas (cost determination function) and for differentiated controlling of costs arising in an organization (cost controlling function).

You can assign activity types to a cost center. These activity types divide the specific activities that can be produced in a cost center.