• Overhead costs are costs which cannot be assigned directly to the production of goods or services. You assign all overhead costs to the locations where they occur or to the actions leading to their creation. You have to plan, record and analyze the costs on appropriate objects.
• Cost elements are used to record, distribute, and allocate the operational expense of an enterprise on a costing basis.
• Cost Element Accounting (CO-OM-CEL) indicates which costs and revenues have occurred and is used for reconciliation of cost controlling with the Financial Accounting (FI) module.
• The cost center represents a separate location of cost occurrence within a controlling area. The definition can be based on functional requirements, allocation criteria, activities or services provided, physical location, and/or area of responsibility.
• The activity type defines the various activities produced or supplied by a cost center. Activity inputs from one cost center to other cost centers, orders, or business processes represent utilization of the cost center’s resources. Valuation of the activity quantity takes place with a price calculated on the basis of business or managerial aspects.
• The business process gathers together sequences of activities within an organization across cost center boundaries. It can be used to structure organizational processes according
• Overhead orders are used to plan, collect, and analyze costs of an organizational
• The different CO objects support multiple methods developed by SAP for allocation of values and quantities, each according to the managerial accounting function of the object in question.