A distinction is made between primary and secondary cost elements:

Costs which are considered as primary cost elements include:

• material costs

• costs for external procurement

These costs are allocated to the order via primary costs, such as material issues.

Costs which 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 allocations.

In the process order, only phases and secondary resources are used to determine manufacturing costs.

Cost elements are recorded in cost segments which are managed for each fiscal year. The system uses the latest start date of the phase or the requirement date of the material to calculate the period of the fiscal year in which 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 issues or completion 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.