What is a cost centre? profit centre?

[Wil_Wilstroth]

Hi,

What is cost centre? what about profit centre? What is the relationship between this two items?

Is there any material how to use me21n?

Thanks

William Wilstroth

[Former Member · Accepted solution]

Hi william,

Please look at the following links:

This is the link for Controlling.

http://help.sap.com/saphelp_erp2005/helpdata/en/02/30793485231774e10000009b38f83b/frameset.htm

The definition of profit centre is one of the node under the link:

http://help.sap.com/saphelp_erp2005/helpdata/en/02/30793485231774e10000009b38f83b/frameset.htm

For the cost centre you can see the following link:

http://help.sap.com/saphelp_erp2005/helpdata/en/5b/d2200743c611d182b30000e829fbfe/frameset.htm

It will gives you more information on profit and cost centre.

Regards,

Hareesha

[Wil_Wilstroth]

- Closing My issue -

Thanks for everyone's contribution on this...

[Former Member]

Hi,

Cost center is a organizational unit which u will classify ur expenses to. cost center can be department or prduct etc. cost centre can be decided when ur creating PO. every expenses in the organization will be attached to some or the other Cost Centre.

Profit center is an organizational unit in controlling to recognise ur profit.

Profit center is attached to material master in costing view

Each cost center shound have profit center but it is not other way round

[Former Member]

Hi William ,

<b>Cost center</b> : 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

<b>Profit center</b> : Organizational unit in Accounting that reflects a management-oriented structure of the organization for the purpose of internal control.

Operating results for profit centers can be analyzed using either the cost-of-sales approach or the period accounting approach.

By analyzing the fixed capital as well, you can expand your profit centers for use as investment centers

For help on how to use ME21n go to the transaction and click on the help menu on the top menu bar and choose the application help .

[Former Member]

Cost center is a organizational unit which u will classify ur expenses cost center can be department or prduct etc. cost centre can be decided when ur creating PO

Profit center is an organizational unit in controlling to recognise ur profit. Profit center is attached to material master in costing view

Each cost center shound have profit center but it is not wise a versa