Cost center logic SAP S/4 HANA.

[Former Member]

Hi Experts,

I am in the phase of business blueprint for SAP S/4 HANA. I have one plant with 22 products(vegetables) and I want to create a cost center and profit center. as per my knowledge, i can create 22 profit center according to the product wise but I don’t know how to decide cost center. under each product, I have 3 grade such as small, medium and large. the client wants to know the cost per product and per grade (like for small, medium and large) Could somebody let me how to solve this issue?

[ajitkumar]

if you are having PCs for each product basis how will you book the common costs like admin , labor etc ? i think you should have a common PC under which you may create cost centers based on what granularity is expected. perhaps like cost center for admin exp, maintenance , manpower exp etc.

[SarhanP]

Hi Anjali,

If you are trying to setup your Product Profitability, then it is better to focus on costs' attributes, not products (you can use product hierarcy for this purpose). Try to organize your Cost Centers regarding different approach, because Cost Centers are type a cost collector. Organize them like Direct Production Cost, Direct Supply Chain Costs, Indirect Supply Chain....

When a Cost is posted in ACDOCA, cost center and if possible (Product itself or any level of Product Hierarchy can be put in the line item) this approach will basically enable your Product profitability.

Hope I understood your question correctly,

Cheers,

Sarhan