Definition

Break points are account assignment elements that allow a cost structure to vary from the production structure. You can create either work breakdown structure (WBS) elements or network activities as break points ( Creating Break Points ). These points are inherited from an assembly downwards in the hierarchy until a new one is determined on a lower planning level.

Use

Break points are important from a controlling perspective. For example, sometimes different departments in a company are responsible for the costs incurred by different parts of the product or project. The parts of a task list or bill of material (BOM) can be assigned to different break points.

Another example would be if, in a project, the finished product was assembled by executing different production orders. From a project perspective, this means that there is only one requirement for the end product, which is accounted to just one WBS element. As a result, this WBS element is debited with all the actual costs.

If a replenishment element has a break point, the appropriate costs are assigned during cost distribution to the break point instead of to the WBS element that caused the requirement and was determined during pegging. Pegging inherits break points in the production hierarchy from the appropriate superior material on the lower-level hierarchy nodes until a new break point is determined.

A break point depends on the project definition, plant, and material; it may also depend on the WBS element that caused the requirement. The break point and the WBS element that caused the requirement are stored in the assignment table in the pegged requirement display.