Transferring Cost Center Costs 

Use

This function makes it possible for you to transfer to Profitability Analysis overhead costs, such as the variances for production cost centers (as a single whole, not according to variance categories) and the costs for sales and administrative cost centers.

Cost center costs are always transferred to one profitability segment:

These cost centers are first credited during production as the activities they perform (such as machine hours and assembly hours) are required. The amount of the credit is based on the quantities confirmed by production and on the activity prices (such as machine hour rates) usually calculated in cost center planning. The balances that are thus achieved - or the overabsorption/underabsorption remaining for the production cost centers due to the difference between credits and actual costs - are transferred en bloc in periodic profit analysis to those profitability segments in CO-PA that caused those costs.

Many companies transfer the costs from administrative cost centers to CO-PA en bloc instead of allocating them to cost objects. This reduces the period results of the individual divisions, product groups, or business areas.

It is also possible to transfer postings that are made in Financial Accounting to cost centers and profitability segments at the same time. In this case, the postings are statistical in Cost Center Accounting, while the true costs are stored in Profitability Analysis. The system ignores these statistical costs in Cost Center Accounting when assessing costs to Profitability Analysis.

Features

For information on the procedure for allocating cost center costs to Profitability Analysis, see the section Methods of Allocating Overhead.