cost object in CO

[Former Member]

Dear forum,

need confirmation of my understanding. hope can get reply.

1) In CO, the important object is the cost objects. these object to tell us where the cost now is sitting. during month end, all these cost object have to be zerorised and all the cost must settle to copa or profit analysis.

2) How to move the cost from 1 cost object to another cost object, it is by using primary cost element or secondary cost element.

3) the only cost object not zerorise is profit analysis.

thanks

Moderator: Please, read and respect SDN rules. Don't use this forum for basic questions

[Former Member]

1. Zerorising the cost object by settling to COPA is a typical design but not mandatory. However objects like production/process orders/product coSt collectors are zerorised by settling to corresponding materials. Balances on cost ctrs/IO's/WBS elements are typically settled ultimatey to COPA - again more typical design not mandatory. If not settled to COPA balance stays on the cost object and typically used for over/ under absorption reporting.

2. To move the cost from one cost obj to other you typically use allocation (distribution using cost element of original posting or Assessment using secondary CE)

3 your understanding is appropriate.

Hope this helps.

Regards

Subodh