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cost component structure

Definition

Number that identifies the structure.

Use

In Product Cost Controlling, the cost component structure determines how the results of material costing are updated. The cost component structure groups the costs for each material according to cost component (such as material costs, internal activities, external activities, and overhead). If the material is used in the production of another material, the cost component split (which breaks down the costs according to material costs, internal activities, external activities, overhead, and so forth) remains in the system when the costs are rolled up.

In the cost component split, you also define the following for material costing:

• Which part of the costs are fixed costs

• Which costs are

• cost of goods manufactured and what are sales and administration costs

• Which costs are relevant for stock valuation, commercial inventory valuation and tax inventory valuation

When the cost component structure is assigned to the organizational units, you can specify that two cost component splits are created:

• Main cost component split
  This is the principal cost component split, meaning that it is used in the standard cost estimate, which can be used to update the material master. The main cost component split can be a cost component split for cost of goods manufactured or a primary cost component split.

• Auxiliary cost component split
  This can exist in addition to the main cost component split, and is not used in the standard cost estimate. It can be used for analysis purposes, in that it can be displayed with the cost estimate and passed on to Profitability Analysis.

In Cost Center Accounting, the cost component structure determines how the results of the activity price calculation are updated. The cost component structure groups the costs for each activity type of the cost center according to components (such as material costs and labor costs). If an internal activity allocation is carried out, the cost component split (which breaks down the costs according to material, labor costs, and so forth) is retained at cost rollup.

If the cost component split is not to be retained, you can create a switching structure for the cost component structure for Cost Center Accounting. In the switching structure, you specify which sender cost component goes into which receiver cost component.