Creation of a Cost Object Hierarchy: Scenario (SAP Library - Cost Object Controlling (CO-PC-OBJ))

Creation of a Cost Object Hierarchy: Scenario

Prerequisites

Before you can create a cost object hierarchy, you must carry out the following steps in Customizing for Product Cost Controlling:

Defining Cost Object Profiles for Cost Object Hierarchies

The cost object profile determines default values for the variance key, the costing sheet, the settlement profile, and the overhead key.

Defining Cost Object Categories for Cost Object Hierarchies

You specify the cost object category, which controls the following:

Which functions are allowed for the cost object nodes

Whether variances can be calculated only for the cost object hierarchy itself, or also for the orders (independently of the cost object hierarchy)

If distribution is not active, which method is used to generate the settlement rules for the cost object nodes

The cost object category specifies a cost object profile.

If you want to assign production orders or process orders to the cost object hierarchy, you should make sure that a settlement rule is generated for these orders that specifies settlement to stock (material) by period.

If you want to assign manufacturing orders to the cost object hierarchy, go into Customizing for Product Cost Controlling and make sure that default rule PP2 (periodic settlement material) is a default value for the relevant order type.

If you want to assign product cost collectors to the cost object hierarchy, the product cost collector has default rule STR (with strategy for tracing factor determination). With this default rule the settlement type is PER (periodic).

You can use the indicator Control through variance key in the cost object category to define an exception to this logic. If this indicator is set, then the way the system handles the order or product cost collector for the material during period-end closing for the cost object hierarchy is determined by whether or not a variance key is specified in the order:

If you have not specified a variance key in the order, the order is considered part of the hierarchy.
If you have specified a variance key in the order, the order will not be included when the variances are calculated for the cost object hierarchy. In this case, variances are calculated and settled for the order separately.

Process Flow

Create cost object nodes.

Create one or more cost object nodes for each level of the hierarchy at which you want to collect actual costs.

Define the structure of the hierarchy.

The master record of a subordinate cost object node points to the cost object node above it in the hierarchy.

Assign objects to the lowest cost object nodes of the hierarchy.

At the lowest level, you can assign the following combinations to the cost object nodes:

Material / plant

The system automatically assigns to the lowest cost object node all product cost collectors or manufacturing orders collectors created for the material / plant.

Material/plant/production process

The system assigns the manufacturing order or product cost collector that has the same characteristic values as a particular production process to the cost object node to which that production process is assigned.

See also:

For detailed information on cost object profiles, see the Implementation Guide (IMG) for Product Cost Controlling under Cost Object Controlling ® Product Cost by Period ® Cost Object Hierarchies ® Define Cost Object Profiles for Cost Object Hierarchies.

For detailed information on cost object categories, see the Implementation Guide (IMG) for Product Cost Controlling under Cost Object Controlling ® Product Cost by Period ® Cost Object Hierarchies ® Define Cost Object Categories for Cost Object Hierarchies.