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Cost Center , Cost element , GL Accounts , Cost sheet , Account Assignment

Dear Experts,

Please explain what are Cost Center , Cost element , GL Accounts , Cost sheet , cost component and structure, Account Assignment and how they are interlinked with each other with transactions.

Thanks,

Ram

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    author's profile photo Former Member
    Former Member
    Posted on Aug 13, 2008 at 11:51 AM

    Dear,

    GL account will assign to Chart of Account.

    GL Account will assign for automatic posting.

    On the basis of GL account cost element will be created.

    Cost element will be assign to cost center.

    Activity type will also assign to Cost center.

    Cost element will assign to cost element group & cost element group will assign to cost component structure.

    For costing sheet required to define base, Over head rate & credit.

    In Account assignment GL will be assign to do direct posting.

    Above all are integrated in direct or indirect manner with each other.

    I hope it will be useful for you.

    GOPAN

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  • author's profile photo Former Member
    Former Member
    Posted on Aug 12, 2008 at 08:41 AM

    Cost Center-It is that segment of activity,responsibility or area which is responsible for Cost Accumulation.Say Purchase & Stores,HR,Accounts,IT,Production Centers etc.These deptt will accumulate some cost.

    GL Codes-These are ledger code which accumulates transacations.Say Consumption of Stores,Wages,Bank Account are a GL Codes.

    Cost Elements-A GL Code may be a PL Code or a Balance Sheet Code.I it is PL Code .Then it may be build in in your Cost of Production.Those Gls which are Incorporated in your Cost Sheet in determining the Cost are called Cost Elements.eg.Interest being a PL Code is not a Cost Element.

    Cost Sheet-Cost Sheet is a statement showing all cost elements and the amount against those cost element which will reflect the Total cost of Production.In S_ALR_87013611 report you can get the Cost Sheet.

    Account Assignment-These are assignments to assign your expenditures to GL Codes.These will help in further breakup & analysis of GL Codes.

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  • author's profile photo Former Member
    Former Member
    Posted on Aug 12, 2008 at 09:32 AM

    Dear,

    Cost element : A cost element classifies the organization's valuated consumption of production factors within a controlling area. A cost element corresponds to a cost-relevant item in the chart of accounts.

    Primary cost element: A cost element whose costs originate outside of CO and accrual costs that are used only for controlling purposes

    Secondary cost element: A cost element that is used to allocate costs for internal activities. Secondary cost elements do not correspond to any G/L account in Financial Accounting. They are used only in Controlling and consequently cannot be defined in FI as an account.

    Cost Center: An organizational unit within a controlling area that represents a defined location of cost incurrence.

    GL Accounts : GL Accounts is master data preparation which is assign to chart of accounts.

    Costin Sheet : The costing sheet integrates all elements of overhead costing. In costing sheet calculation base, cost element & Overhead rate & credit are define.

    cost component and structure :

    Cost component - Makes the costs of a material, an activity type, or a process transparent & Groups the costs of a material according to the requirements for material valuation and profitability analysis

    cost component structure : It is use for

    Activity prices for an activity type

    Cost of a process

    Planned cost of a product

    Material costs passed on to material valuation as the standard price or inventory price

    Cost of goods manufactured passed on to Profitability Analysis

    Account Assignment : It's use for direct posting. In this we have to assign GL which is required to post directly.

    GOPAN

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