SAP CO Consultant Certification

Certification Test
SAP Consultant Certification Solution Consultant Financials –
Management Accounting with my SAP ERP 2005

Software
* Software components: SAP ERP Central Component 6.0

Number of Questions
80

Duration
180 minutes

Notes

* Please note that you are not allowed to use any reference
materials during the certification test (no access to online
documentation or to any SAP system).
* The certification test Solution Consultant Financials –
Management Accounting with my SAP ERP 2005 verifies the knowledge in
the area of the mySAP ERP Financials for the consultant profile
Management Accounting. This certificate proves that the candidate has
a basic understanding within this consultant profile, and can
implement this knowledge practically in projects.

Competency Areas
The following list helps you to identify the competency areas covered
in this test. The percentage indicates the portion of the test
dedicated to a particular competency area.

Competency

Material Cost Estimate With Quantity Structure
Analyses and error handling TFIN20 AC505
BOM TFIN20 AC505
BOM and task list determination TFIN20 AC505
Cost component split TFIN20 AC505
Costing variant TFIN20 AC505
Create costing run TFIN20 AC505
Overhead costing sheet TFIN20 AC505
Price update TFIN20 AC505
Routing TFIN20 AC505

Cost Center Accounting / Profit Center Accounting
Account assignment help TFIN20 AC405
Accrual calculation TFIN20 AC405
Adjustment postings TFIN20 AC405
Assessment TFIN20 AC405
Direct activity allocation TFIN20 AC405
Distribution TFIN20 AC405
Integrated plan allocation cycle TFIN20 AC405 AC040
Introduction to planning in Management Accounting TFIN20 AC405 AC040
Master data cost elements, cost centers, activity types and stat
TFIN20 AC405
Organizational units TFIN20 AC405 AC040
Periodic reposting TFIN20 AC405 AC040
Planning methods in cost center planning TFIN20 AC405
Profit center assignment TFIN20 AC610
Profit center master data TFIN20 AC610
Reconciliation ledger TFIN20 AC405
Recording primary postings TFIN20 AC405

Cost Object Accounting: Make-to-Stock Production with Periodic C
Decoupling scenarios TFIN22 AC520
Period-end closing for periodic Controlling TFIN22 AC520
Preliminary costing on cost object TFIN22 AC520
Product cost collector TFIN22 AC520
Simultaneous costing on cost object TFIN22 AC520
Cost Object Controlling: Make-to-Stock Production with Order Con
11-20%
Cost objects with order view TFIN22 AC520
Period-end closing with order Controlling TFIN22 AC520
Preliminary costing of cost objects TFIN22 AC520
Simultaneous costing TFIN22 AC520

Cost Object Controlling: Sales-Order-Related Production
Delivery and billing documents TFIN22 AC520
Period-end closed with product cost by sales order TFIN22 AC520
Preliminary costing of sales order TFIN22 AC520
Sales order as cost object TFIN22 AC520
Simultaneous costing of sales order TFIN22 AC520

Material Cost Estimate Without Quantity Structure
Base object costing and simulation costing TFIN20 AC505
Material master – fields relevant to costing TFIN20 AC505
Multiple-level unit costing TFIN20 AC505
Single-level unit costing TFIN20 AC505

Overhead Cost Orders
Billing for overhead cost orders TFIN20 AC405
Budgeting and availability control TFIN20 AC405
Commitments management TFIN20 AC405
Master data maintenance TFIN20 AC405
Overhead rates on overhead cost orders TFIN20 AC405

Source:
http://www.sap.com/services/education/certification/

How to became FI/CO Consultant

Month 1
Step 1 : Watch SAP Computer Based Training Video SAP
System Management – System Administration Basic & SAP System
Management – System Administration Basic Advanced User + CCMS
Step 2 : Study And Practice The Training Manual (9 set)
Step 3 : Watch SAP Computer Based Training Video Shipping
Clerk, SOP and Structure OP
Step 4 : Study And Practice The Training Manual AA, AP,
AR, CO-CCA, CO-IO, COPA, CO-PC and GL

Month 2
Step 5 : Walk Through SAP Q&A Material
Step 6 : Browse Configuration Quick Notes
Step 7 : Study The SAP Real-Life Blueprint Documentation
(AA, AP, AR, CO dan GL)

Month 3
Step 8 : Study The FI/CO Popular Interview Questions And
Answers
Step 9 : Tips To Behave Like An Experienced Consultant In
The Job With Other Consultants
Step 10 : Repeat All The Above Steps For Once
Step 11 : Now Consider Yourself As An Experienced SAP
Consultant And Start Applying For A SAP Job Using Our SAP FI/CO

Sample Resume!

“If you are struggling in FI module in front of others just tell
them you have been so busy with CO module for quite sometime that
you forget some of the FI module functions. If you are struggling in
CO module instead, tell them the other way around. This is a very
valid reason in SAP workplace which are even used by senior
consultants”

“Talk about the limitations on previous versions of SAP like 4.6c
and 3.0. This will give an impression that you have been in the
industry for quite sometime working with older versions of SAP. One
popular limitation in 3.0 is the menu style which is not the tree
view. It is like the conventional menu which appears on top of the
screen.”

SAP FI/CO Interview and Certification Questions – Part 5

Organizational Units

1. Select the correct statements

a) The controlling area is the highest reporting level for profitability analysis
b) Data for overhead cost controlling is extracted from the operating concern
c) Product cost controlling extracts data from the controlling area
d) The business area is an organizational unit within financial accounting
e) Profit center accounting is a component of overhead cost controlling

2. Which of the following statements are true or false

a) The controlling area currency must be defined as the group currency
b) Company codes assigned to the same controlling area must have the same operational chart of accounts
c) Profit center accounting extracts data from the controlling area
d) The product cost controlling component enables you to calculate the minimum price at which a product can be profitably marketed
e) Profitability analysis is used to evaluate external market segments

Master Data

3. Select the correct statement(s)

a) Cost centers are assigned to the standard hierarchy through the master record
b) Cost centers can be assigned to any level in the standard hierarchy
c) Cost center categories enable you to assign the same characteristics to similar cost centers
d) All primary cost elements have a one to one relationship with the general ledger expense accounts
e) Secondary cost elements can only be created and used within controlling

4. Which of the following statements are true or false

a) All activity types can be used with all cost centers
b) An activity type allows you to allocate costs from FI according to tasks that were performed by other departments
c) Statistical key figures can be defined as either a fixed value or a totals value
d) Master data that can be grouped together include controlling areas and operating concerns
e) Activity types cannot be grouped like cost centers, cost elements and statistical key figures

Transaction Based Postings

5. Select the correct statements

a) Document numbering is defined according to the grouping of controlling transactions
b) When posting to a cost center and true order, the posting to the cost center becomes statistical
c) Profit center postings can be true postings if the indicator is selected in the master record
d) Postings to cost centers primarily arise out of transaction based postings in FI
e) When posting a transaction within FI, only one true object and one statistical object can be selected

6. Which of the following statements are true or false

a) Default cost centers can be specified in the cost element master record
b) Default cost elements can be specified in the cost center master record
c) Profit centers defaulted from the cost center master record, when posting an expense in FI can be changed in the document
d) Default values from customizing take preference over default values from the master records
e) Line items that are reposted in CO update the cost center in the original document in FI

Period-end Closing 

7. Select the correct statement(s)

a) Costing sheets are defined for the percentage method of the accrual calculation
b) Periodic reposting is performed when costs are manually reposted from one cost center to another according to a specific statistical key figure
c) The assessment cycle allows for the collection of both primary and secondary costs, and reposts the values using the original cost elements
d) Distribution is the method by which primary costs are reposted using the original cost elements
e) Allocation structures assigned to the distribution cycle allow for the grouping of cost elements and repost using secondary cost elements

8. Which of the following statements are true or false

a) The reconciliation ledger allows for the reconciliation of CO components
b) The period lock must be set for both plan and actual data
c) The period lock is automatically set when the FI period is closed
d) An overhead structure is assigned to a costing sheet
e) The results of an assessment can be reviewed in the cost center – actual/ plan/ variance report
Planning

9. Select the correct statement(s)

a) Planning profiles are defined with header rows and lead columns
b) Multiple planning layouts can be assigned to a single planning profile
c) Distribution keys can only be used when planning for a single period at a time
d) Planning using activity types can only be performed if the statistical key figures are planned as well
e) Activity dependant planning means planning with the use of an activity type

10. Which of the following statements are true or false

a) In order to transfer planned data from HR, a valid employee master record must exist along with a valid cost center, and the two records must be linked
b) Plan distribution allows for the distribution of secondary costs
c) It is not possible to perform planning using statistical key figures
d) It is possible to copy actual data to planning data as long as the planning version has been created first
e) All controlling objects are automatically transferred when one plan version is copied over to another

Internal Orders

11. Select the correct statement(s)

a) All internal orders must be created according to a specific order type
b) Four categories of internal orders exist namely overhead, investment, financial and revenue orders
c) Statistical orders are used for reporting purposes only
d) Accrual orders allow for the raising of accruals on the order itself
e) Internal orders are company code specific and must reference a profit center in the internal order master record

12. Which of the following statements are true or false

a) Orders cannot be grouped like cost centers and cost elements
b) Substitution rules are used for mass maintenance to internal orders
c) A commitment can be raised on an order when a purchase order or purchase requisition is created
d) A settlement procedure must be specified for all order types
e) An allocation structure allows you to determine whether cost elements must be grouped together and settled using a specific cost element, or if the original cost element can be used for the settlement of true order values


SAP FI/CO – Interview and Certification Questions – Part 3

Clearing

1. Select the correct statement(s)

a) All open item accounts are cleared automatically by running the automatic account clearing program
b) The open item indicator in the customer/ vendor master record must be activated in order to clear customer/ vendor open items
c) The open item indicator along with the line item display indicator is usually activated in the balance sheet clearing and profit and loss accounts
d) Accounts that are not automatically cleared can be cleared manually using the account clear function
e) A clearing document contains the line items to be cleared

2. Which of the following statements are true or false

a) All payment documents are clearing documents
b) Standard system maintenance includes clearing open items on a regular basis, either manually or automatically
c) Standard open items, special G/L transactions and noted items can be selected for clearing
d) If documents were cleared in error, the clearing must first be reset and the document must be reversed before attempting to clear again
e) Documents that are cleared have reference to the clearing document number in the document line items

Tolerances and payment differences

3. Select the correct statement(s)

a) Tolerance groups can be defined for customers, vendors and employees
b) The tolerance groups contain settings for permitted payment differences
c) Alternative accounts can be specified for the posting of payment differences
d) The values specified for the tolerances can be entered in a currency of your choice
e) All users that were not assigned to a tolerance group are by default assigned to the blank tolerance group

4. Which of the following statements are true or false

a) Tolerance groups can be assigned to general ledger accounts
b) Permitted payment differences are either defined as an amount or a percentage, not both
c) A reason code must be specified in the tolerance group for charging off payment differences
Financial Statements

5. Select the correct statements

a) Financial statements are defined according to financial statement versions
b) Financial statements can have a maximum of 10 hierarchy levels and are company code specific
c) Accounts can be assigned to different nodes in the hierarchy of the financial statements
d) Amounts are reflected in various groups within the financial statements according to the debit/ credit indicator and the specification of the general ledger accounts
e) Companies are restricted to 3 financial statement versions according to the 3 different charts of accounts

Payments

6. Which of the following statements are true or false

a) Payments from customers are usually processed using the automatic payment program
b) Customizing the automatic payment program includes defining payment methods by country as well as by company code
c) Partial payments clear the open items and cause residual items to be posted back to the account
d) Line items that are created when charging off the difference back to a vendor’s account, have reference to the original document that is being short paid
e) A document which is selected in the payment run, can be reallocated to a different payment method and house bank

7. Select the correct statement(s)

a) All vendor line items can be paid, as long as there is a reference to the house bank in the vendor master record
b) Every general ledger account that is linked to a house bank, must be maintained in the currency of the bank account
c) Specific programs linked with specific variants are used to create various types of payment media
d) Cheques (checks) that are not used are automatically voided by the system
e) All vendors must be assigned to a payment procedure in the master record in order to generate payments from the automatic payment program

Dunning

8. Which of the following statements are true or false

a) A dunning procedure must be assigned to the customer master record in order to dun the customer for late payments
b) Customers are only dunned according to the settings in the dunning procedure, which include the frequency, whether or not line items are printed with every letter that is issued, and how many grace days the system will accept before issuing a dunning letter
c) Dunning charges are levied on the customer’s account, and are reflected as a separate line item on the dunning letter
d) Interest can also be levied on the customer’s account according to the interest indicator in the customer master record
e) The master record of the customer is updated with the dunning level according to the highest dunned document in the customer account
f) Customers can be blocked from dunning by entering a dunning block key in the customer master record

Financial Closing

9. Select the correct statement(s)

a) An unrealized foreign currency valuation is created every time a foreign currency payment is made or received
b) Balance sheet accounts should be valuated according to the line items in the account
c) Assets are depreciated according to the depreciation key and useful life specified in the asset master record
d) The asset register is updated independently of the general ledger accounts for accumulated and expense depreciation
e) Balance confirmations are customized in the IMG, and cannot be linked to SAPScript forms

10. Which of the following statements are true or false

a) All reports must be executed using set variants, or user defined variants
b) The GR/IR account is a clearing account that must be maintained regularly by clearing open items
c) The balance carried forward program carries the balances of the accounts forward into the new posting period
d) The reconciliation ledger allows you to automatically reconcile the financial accounting and controlling modules
e) Assets under construction are settled periodically to fixed assets
f) Accrual documents are automatically reversed on the first day of the following period


SAP FI/CO – Interview and Certification Questions – Part 4

Clearing

1. Select the correct statement(s)

a) All open item accounts are cleared automatically by running the automatic account clearing program
b) The open item indicator in the customer/ vendor master record must be activated in order to clear customer/ vendor open items
c) The open item indicator along with the line item display indicator is usually activated in the balance sheet clearing and profit and loss accounts
d) Accounts that are not automatically cleared can be cleared manually using the account clear function
e) A clearing document contains the line items to be cleared

2. Which of the following statements are true or false

a) All payment documents are clearing documents
b) Standard system maintenance includes clearing open items on a regular basis, either manually or automatically
c) Standard open items, special G/L transactions and noted items can be selected for clearing
d) If documents were cleared in error, the clearing must first be reset and the document must be reversed before attempting to clear again
e) Documents that are cleared have reference to the clearing document number in the document line items

Tolerances and payment differences

3. Select the correct statement(s)

a) Tolerance groups can be defined for customers, vendors and employees
b) The tolerance groups contain settings for permitted payment differences
c) Alternative accounts can be specified for the posting of payment differences
d) The values specified for the tolerances can be entered in a currency of your choice
e) All users that were not assigned to a tolerance group are by default assigned to the blank tolerance group

4. Which of the following statements are true or false

a) Tolerance groups can be assigned to general ledger accounts
b) Permitted payment differences are either defined as an amount or a percentage, not both
c) A reason code must be specified in the tolerance group for charging off payment differences
Financial Statements

5. Select the correct statements

a) Financial statements are defined according to financial statement versions
b) Financial statements can have a maximum of 10 hierarchy levels and are company code specific
c) Accounts can be assigned to different nodes in the hierarchy of the financial statements
d) Amounts are reflected in various groups within the financial statements according to the debit/ credit indicator and the specification of the general ledger accounts
e) Companies are restricted to 3 financial statement versions according to the 3 different charts of accounts

Payments

6. Which of the following statements are true or false

a) Payments from customers are usually processed using the automatic payment program
b) Customizing the automatic payment program includes defining payment methods by country as well as by company code
c) Partial payments clear the open items and cause residual items to be posted back to the account
d) Line items that are created when charging off the difference back to a vendor’s account, have reference to the original document that is being short paid
e) A document which is selected in the payment run, can be reallocated to a different payment method and house bank

7. Select the correct statement(s)

a) All vendor line items can be paid, as long as there is a reference to the house bank in the vendor master record
b) Every general ledger account that is linked to a house bank, must be maintained in the currency of the bank account
c) Specific programs linked with specific variants are used to create various types of payment media
d) Cheques (checks) that are not used are automatically voided by the system
e) All vendors must be assigned to a payment procedure in the master record in order to generate payments from the automatic payment program

Dunning

8. Which of the following statements are true or false

a) A dunning procedure must be assigned to the customer master record in order to dun the customer for late payments
b) Customers are only dunned according to the settings in the dunning procedure, which include the frequency, whether or not line items are printed with every letter that is issued, and how many grace days the system will accept before issuing a dunning letter
c) Dunning charges are levied on the customer’s account, and are reflected as a separate line item on the dunning letter
d) Interest can also be levied on the customer’s account according to the interest indicator in the customer master record
e) The master record of the customer is updated with the dunning level according to the highest dunned document in the customer account
f) Customers can be blocked from dunning by entering a dunning block key in the customer master record

Financial Closing

9. Select the correct statement(s)

a) An unrealized foreign currency valuation is created every time a foreign currency payment is made or received
b) Balance sheet accounts should be valuated according to the line items in the account
c) Assets are depreciated according to the depreciation key and useful life specified in the asset master record
d) The asset register is updated independently of the general ledger accounts for accumulated and expense depreciation
e) Balance confirmations are customized in the IMG, and cannot be linked to SAPScript forms

10. Which of the following statements are true or false

a) All reports must be executed using set variants, or user defined variants
b) The GR/IR account is a clearing account that must be maintained regularly by clearing open items
c) The balance carried forward program carries the balances of the accounts forward into the new posting period
d) The reconciliation ledger allows you to automatically reconcile the financial accounting and controlling modules
e) Assets under construction are settled periodically to fixed assets
f) Accrual documents are automatically reversed on the first day of the following period


SAP FI/CO Interview and Certification – Part 2

Navigation

1. Select the correct statement(s)

a) When logging on to the R/3 system for the first time, you are required to change your password
b) Your customized personal settings are only available on a particular PC
c) The system menu is standard on all SAP screens
d) The SAP library is one of the help options, it also displays comprehensive help on the current application
e) F1 provides a list of field values or an option to search for the information in the case of an extensive list

2. Which of the following statements are True or False

a) You can only have one R/3 session open at a time
b) A client number is not required to log on to the SAP system
c) The help menu is only available when performing a particular task
d) The command field provides general information on the SAP system and transaction or task you’re working on
e) The status bar provides general information on the SAP system and transaction or task you’re working on
f) You can only create a favorites list containing transactions

Organizational Structures

3. Select the correct statement(s)

a) The Client is the highest legal entity in the SAP system architecture
b) One or many business areas can be assigned to a company code
c) Clients share master records and transaction tables
d) Multiple company codes can be assigned to a single controlling area
e) Company codes using different operational chart of accounts can be assigned to the same controlling area

4. Which of the following statements are True or False

a) A controlling area must be assigned to a company code for the purpose of transferring data to cost accounting for further processing
b) Cross company code controlling can be performed when one company code is assigned to multiple controlling areas
c) Business areas must be defined in the SAP organization structure
d) Data for profitability analysis is extracted from the operating concern
e) Company codes assigned to the same controlling area must have the same operational chart of accounts and the same fiscal year variant

General Settings

5. Select the correct statement(s)

a) A Fiscal year must be defined the same as a calendar year
b) A non calendar fiscal year can have any amount of posting periods
c) If the fiscal year is the same as the calendar year, year shifts must be specified for each posting period
d) The periods for a year dependant fiscal year are the same every year
e) The periods for a year independent fiscal year are the same every year
f) A shortened fiscal year must be defined as year dependant

6. Which of the following statements are True or False

a) Tax codes are defined per company code
b) Exchange rate types can be identified as US dollars, British Pounds etc.
c) An exchange rate spread is the difference between the bank buying rate and the bank average rate or the bank average rate and the bank selling rate
d) The minimum entry to open and close posting periods is the “+” indicator
e) You can only define 4 special periods for any fiscal year

Financial Accounting – G/L Master Data

7. Select the correct statement(s)

a) The chart of account segment (client segment) and company code segment form the complete G/L master record
b) The company code segment does not need to be activated for all the accounts in the chart of accounts
c) The currency of the account must be specified at the chart of accounts level
d) A field status group determines which fields are suppressed, displayed, required or optional
e) The field status group is assigned at the company code level

8. Which of the following statements are True or False

a) The ratio between operational chart of accounts and group chart of accounts is 1 to 1
b) The ratio between operational chart of accounts and country specific chart of accounts is 1 to 1
c) If the account currency is different to the company code currency, you can post amounts to the account in any currency
d) If the account currency is the same as the company code currency you can post amounts to the account in any currency
e) The group account determines the number range of the G/L account
f) The same number range can be assigned to all account groups

Financial Accounting – AP and AR Master Data

9. Select the correct statement(s)

a) The client segment, company code segment and purchasing organization segment form the complete customer master record
b) A vendor/ customer master record can be created for multiple company codes
c) The vendor account number is the link between AP and the G/L
d) More than one recon account can be specified per customer in the customer master record
e) An authorization group must be customized and assigned to every master record

10. Which of the following statements are True or False

a) The payment term must be assigned at the client segment, but can be changed at the company code segment
b) All customers within the same account group must have the same payment terms
c) The vendor’s banking details can be specified at the client segment for the purpose of EFT payments
d) Number ranges for customer and vendor accounts are determined per account group
e) 2 controls of the field status exist namely the account group and the transaction (ie. Create, change or display)

Document Control

11. Select the correct statement(s)

a) The document type controls the field status of the document
b) The posting date determines the posting period in the document
c) The posting key only determines the account of the posting, and whether the value is going to be a debit or a credit
d) Document numbers are always automatically assigned once the document is posted
e) Document types determine which account types can be posted to

12. Which of the following statements are True or False

a) Posting periods are opened and closed automatically
b) No more than 2 posting periods can be open at the same time
c) Posting keys are defined at the client level
d) The posting key used to debit a vendor account is 11
e) The posting key used to credit a customer account is 21


SAP CO Module- Number ranges

Number ranges

Configuration in the CO (Controlling) Modules requires maintenance of number ranges for documents generated from business transactions. A systems’ generated document number is assigned for every CO (Controlling) posting. These numbers are sequential and are required to be assigned to number range groups. The number range groups consists of two number intervals, one for internal document numbering and one for external document numbering. The SAP R/3 system keeps track of those document numbers that are externally generated and fed to SAP via batches and User manual input, otherwise, the system generates the next internally assigned document number for the transaction posted.

As previously stated when defining the Controlling Area, you have the ability to copy the Standard SAP Controlling Area “0001” which already has the number ranges defined eliminating the need for maintenance of number ranges. Keep in mind that you also have the flexibility to change number ranges and number range groups to meet your business needs. As a caution, never overlap number intervals in a group . For example, if you decide to assign number range interval 10000000 thru 199999999 to the number range group “05”, you can not assign it to number range group “06”. Number ranges should never be transported for data consistency purposes, therefore create these manually in each system.

Within the CO (Controlling) Module, you can configure Plan Versions. Maintaining Plan Versions allows for set-up of planning assumptions and determination of plan rates for allocation and plan activity purposes. The SAP Standard Version “000” is created for a five year fiscal year plan. It is recommended that the standard version be utilized for your plan/actual comparisons if you do not require multiple plan versions. SAP always allows the flexibility to create additional Plan versions by coping the Standard Version “000” and changing certain fields as required. There is also the option of defining and creating a totally new Plan Version.

SAP CO Module – Configuration

Primary configuration considerations

There are several configuration steps that must be considered when implementing the CO (Controlling) Module. Creating the Controlling area is one of the first steps in the CO (Controlling) configuration process. SAP has provided standard controlling areas and company codes which can be utilized as a basis for creating your company’s Controlling Area. The SAP Standard for Controlling Area is “0001” and for company code is “0001”.

It is recommended that these be used as a basis to create the Controlling Area or Company Code that you would like to define . Certain defaults setting such as number ranges have already been set-up in the standard SAP settings, thereby eliminating the need to redo this configuration requirement. Through the SAP Configuration process, you can create a copy of the Standard Controlling Area and Company Code, then update the other fields as needed including the four character alpha numeric field which identifies these areas. (You may want to change the controlling area from “0001” to “A001” and the Company Code from “0001” to “ AA01” as an example.)

Keep in mind that Company Codes are assigned to Controlling Areas and affect the COA (Chart of Accounts), the Fiscal Year Variants, and Currency set-ups. Cost Center hierarchy and Reconciliation ledger settings are also include in the Controlling Area set-up.

The Control Indicator activates and deactivates certain functions in the Controlling Area. The Controlling Area can also be used for cross-company code business transactions. To enable this function the Controlling Area must be assigned to all company codes used for cross-company code accounting.

SAP CO Module – Introduction

Introduction

The SAP CO (Controlling) Module provides supporting information to Management for the purpose of planning, reporting, as well as monitoring the operations of their business. Management decision-making can be achieved with the level of information provided by this module.

Some of the components of the CO(Controlling) Module are as follows:

· Cost Element Accounting

· Cost Center Accounting

· Internal Orders

· Activity-Based Costing ( ABC)

· Product Cost Controlling

· Profitability Analysis

· Profit Center Accounting

The Cost Element Accounting component provides information which includes the costs and revenue for an organization. These postings are automatically updated from FI (Financial Accounting) to CO (Controlling). The cost elements are the basis for cost accounting and enables the User the ability to display costs for each of the accounts that have been assigned to the cost element. Examples of accounts that can be assigned are Cost Centers, Internal Orders, WBS(work breakdown structures).

Cost Center Accounting provides information on the costs incurred by your business. Within SAP, you have the ability to assign Cost Centers to departments and /or Managers responsible for certain areas of the business as well as functional areas within your organization. Cost Centers can be created for such functional areas as Marketing, Purchasing, Human Resources, Finance, Facilities, Information Systems, Administrative Support, Legal, Shipping/Receiving, or even Quality.

Some of the benefits of Cost Center Accounting :
(1) Managers can set Budget /Cost Center targets;
(2) Cost Center visibility of functional departments/areas of your business;
(3) Planning ;
(4) Availability of Cost allocation methods; and
(5) Assessments/Distribution of costs to other cost objects.

Internal Orders provide a means of tracking costs of a specific job , service, or task. Internal Orders are used as a method to collect those costs and business transactions related to the task. This level of monitoring can be very detailed but allows management the ability to review Internal Order activity for better-decision making purposes.

Activity-Based Costing allows a better definition of the source of costs to the process driving the cost. Activity-Based Costing enhances Cost Center Accounting in that it allows for a process-oriented and cross-functional view of your cost centers. It can also be used with Product Costing and Profitability Analysis.

Product Cost Controlling allows management the ability to analyze their product costs and to make decisions on the optimal price(s) to market their products. It is within this module of CO (Controlling) that planned, actual and target values are analyzed. Sub-components of the module are:

· Product Cost Planning which includes Material Costing( Cost estimates with Quantity structure, Cost estimates without quantity structure, Master data for Mixed Cost Estimates, Production lot Cost Estimates) , Price Updates, and Reference and Simulation Costing.

· Cost Object Controlling includes Product Cost by Period, Product Cost by Order, Product Costs by Sales Orders, Intangible Goods and Services, and CRM Service Processes.

· Actual Costing/Material Ledger includes Periodic Material valuation, Actual Costing, and Price Changes.

Profitability Analysis allows Management the ability to review information with respect to the company’s profit or contribution margin by business segment. Profitability Analysis can be obtained by the following methods:

· Account-Based Analysis which uses an account-based valuation approach. In this analysis, cost and revenue element accounts are used. These accounts can be reconciled with FI(Financial Accounting).

· Cost-Based Analysis uses a costing based valuation approach as defined by the User.

Profit Center Accounting provides visibility of an organization’s profit and losses by profit center. The methods which can be utilized for EC-PCA (Profit Center Accounting) are period accounting or by the cost-of-sales approach. Profit Centers can be set-up to identify product lines, divisions, geographical regions, offices, production sites or by functions. Profit Centers are used for Internal Control purposes enabling management the ability to review areas of responsibility within their organization. The difference between a Cost Center and a Profit Center is that the Cost Center represents individual costs incurred during a given period and Profit Centers contain the balances of costs and revenues.