In Profitability Analysis, all sales to external customers (outside the group) are represented from the point of view of the legal organizational unit (company code). This view only shows you the external sales, valuated using the legally oriented cost of goods manufactured.
If your organization uses profit centers, which operate independently on the market just like separate companies, you need to be able to see internal sales, such as goods withdrawals or deliveries, between profit centers if you want to be able to analyze the profitability of your profit centers. Moreover, you need to be able to see the external sales valuated from the viewpoint of the individual profit centers - in other words, valuated with the cost of goods manufactured on the basis of transfer prices.
In the following sections, you set up the transfer of values from the viewpoint of your profit centers to costing-based CO-PA.