A cost object hierarchy consists of the following elements:
Cost object nodes
Single objects assigned to the lowest nodes of the hierarchy, such as a material/plant combination and product cost collectors and manufacturing orders assigned through this combination.
The costs for the cost object nodes and the assigned orders are settled when you perform periodic settlement.
Note
Both the settlement rules for the cost object nodes in the hierarchy and the settlement rules for the orders assigned to the hierarchy must specify periodic settlement (see also: Settlement in Product Cost by Order or Period ).
Settlement Receivers
At the end of the period, the costs that were assigned directly to the cost object nodes are either:
First distributed to the assigned single objects and then settled to Financial Accounting (FI) (price difference account with S price control, material stock account with V price control) and possibly a profitability segment in Profitability Analysis (CO-PA) (see also: Period-End Closing for Cost Object Hierarchies with Distribution ) or
Dynamically summarized to the highest cost object node under which a cost element was posted, together with the assigned single objects, and
First settled to the highest cost object node and then to a price difference account in FI
This type of settlement uses material account determination.
SAP recommends this type of settlement if you do not want to perform distribution.
From each cost object node, price differences are settled to FI.
This type of settlement uses manual account assignment.
Procedures for Creating Settlement Rules
The settlement rules for cost object hierarchies without distribution can be created using two different procedures. You control which procedure is active in Customizing for Product Cost by Period under
.Settlement through material account determination
Settlement with manual account assignment
Note that if you are using cost object hierarchies, the order balance will usually show a shortage because some costs for the materials being produced were entered at the level of the hierarchy, while the balance of individual cost object nodes will show a surplus.
Note
For materials with price control indicator S , the moving average price updated for statistical purposes during settlement.
This function is not active for materials that are assigned to a cost object hierarchy.
See also:
For detailed information on settling cost object hierarchies, refer to the IMG for Product Cost Controlling in Cost Object Controlling under
.For information on processing cost object hierarchies in the period-end closing process, refer to the following sections:
Period-End Closing for Cost Object Hierarchies Without Distribution
Period-End Closing for Cost Object Hierarchies with Distribution