cost component split (CO-PC)

Product Cost Controlling (CO-PC)

A breakdown of costs into units called cost components, which provide detailed cost information for accounting purposes.

Cost component splits can be used to break down the cost of a material, process, or activity type.

Examples of cost components in a cost component split:

• In Product Cost Controlling (CO-PC) and Profitability Analysis (CO-PA):
• Material
• Internal activities
• External activities
• Overhead
• Other
• In Overhead Cost Controlling (CO-OM):
• Energy
• Labor
• Raw materials
• Other

There are two types of cost component split:

• Cost component split for the cost of goods manufactured (not used in CO-OM)
• Primary cost component split

Grouping multiple cost elements into one cost component facilitates cost analysis, helping you to answer questions such as the following:

• In CO-PC and CO-PA: Is the increase in the cost of goods manufactured due mainly to higher material costs or higher labor costs?
• In CO-OM: How much of the total price of an activity type is material costs?

In CO-PC and CO-PA, the cost component split can be used to roll up costs, enabling you to see the value added in production separately for each production level.

In CO-PC (and for CO-PA), a separate cost component split can be generated for each partner that supplied a resource for the product. Possible partners:

• Company code
• Plant
• Profit center
• Business area

When allocating activities in CO-OM to determine prices, you can use a switching structure to enable the costs to flow into different cost components for the receiver than for the sender.