cost center

[Former Member]

Hi ,

What is difference in cost center and master cost center? What is ORG level and EMPLOYEE level assignment of cost center? Where can be master cost center assined means( 1018,0027,1008)?

shruti

[sikindar_a]

Cost Center

1. Cost center which controls and maintain the cost relevant activities of the company. It is controlled by FICO peoples. Work centers are the exact work location of the employee where the company doing the daily transactions.

2. Cost centre is an object used to refer to work centre activities are going on from cost point of view which is important from cost point of view. Work centers are the objects (physical locations) where actual work takes place

3. Cost Center is for assigning Symbolic acounts related for Posting in GL Accounts.

Cost Centers (K)

Cost centers are maintained in Financial Accounting. Each organizational unit will be either assigned a default cost center or will inherit a default cost center from the supervising organizational unit.

The default cost center, in combination with a fund, will be used as the default payroll account for the organizational unit. The default cost center will ONLY be used if the cost distribution data for an employee is invalid at the time of payroll posting.

The default cost center assigned to the organization unit will also be used during the Budget process to extract employees into the correct budgeting groups.Prior to making any changes to default cost center assignments, it is critical that the changes be confirmed with the Financial Accounting and Budget areas.

Additionally from FI point of view

An employee is aatched to a Cost center thru a position in IT0001

In Posting a document , for some GL accounts posting the company requires to post the Amount based on cost center and Business Areas to get to know the expense statement for a particular BA and a CC

For eg Basic WT .

Basic (1.) WT ---> (2.)Sym Acc --> (3.)GL Acc -> Cost center/B.A.-> Employee

.

Employees are linked to a CC & BA of teh Wt will form in the expense report and the jornal report

Cost Centre IT0027 and IT1018 are same dont get confused the assignment will get differ

Edited by: Sikindar on May 11, 2009 10:07 AM

[Former Member]

Master cost center can be assigned at Org level or at position level also.. watever cost center is displayed in IT0001 is your master cost center. at org level it can be assigned on PO10 (1001 infotype).

choose Type of related object - K

Relationship type/relationship -A 011(A|011 Cost center assignment)

Similarly u can do it at position level.

For employee level u can use PA30 - IT0027 (Cost Distribution)

[Former Member]

Hi Shruti,

What is difference in cost center and master cost center?

Master cost center is nothing but a cost center. Since it is related to some root org unit we call it as Master cost center

And other cost centers are under the master cost center which are assigned to sub org units.

What is ORG level and EMPLOYEE level assignment of cost center?

You can assign cost center to both position and Org unit. The most commonly is assigning the Cost Center to Org unit, because once you assign the Cost Center to Org unit, then there is no need to set cost center for sub Org unit and the Positions under that Org unit, if you want, you can change at that level too. It will reduce your Time during the Customizing.

Where can be master cost center assined means( 1018,0027,1008)?

IT 1018 determines how costs are to be distributed between several cost centers.This is used you wish to distribute costs to more than one cost center.

IT0027 is used to distribute your amount in to various Cost Centers.

If IT0027 is absent, then value in IT 1018 is taken.

Using IT 1008 (Account Assignment Infotype) you can maintain the cost center. Cost center gets inheritance from the root object.

Regards

Ghouse

[Former Member]

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

The definition can be based on:

Functional requirements

Allocation criteria

Physical location

Responsibility for costs

Master Cost Centre will assign in OM , Cost Center will assign in PA-IT0027