A distinction is made between primary and secondary cost elements:

Costs that are considered as primary cost elements include:

• Material costs

• Costs for external procurement/external processing

These costs are assigned to the order, for example, via primary costs, such as material withdrawals or the purchasing of externally processed parts.

Costs that are considered to be secondary cost elements include:

• Production costs

• Material overhead costs

• Production overhead costs

These costs are allocated to the order via internal cost allocation.

Cost elements are recorded in so-called cost segments that are managed per fiscal year. The system uses the latest start date of the operation or the requirement date of the material to calculate in which period of which fiscal year the planned costs of an order are incurred.

Both planned costs and actual costs are recorded in cost segments. Actual costs are updated when material withdrawals or confirmations are carried out for the order, or when a goods receipt is posted for an externally procured material component, for example. This enables you to compare planned with actual costs at any stage of order processing.