Cost Element Master in SAP

Primary / Revenue Cost element :

Primary / Revenue Cost Element is a carrier for transmitting cost or revenue respectively from FI to CO module. Items in a chart of accounts that are relevant to cost or revenue are referred to as either Primary or Revenue Cost element in controlling.

Secondary Cost element :

Secondary Cost Element is a cost element that is used to allocate costs for internal activities, overhead cost and assessment.  Secondary cost elements do not correspond to any G/L account in Financial Accounting. They are used only in Controlling and consequently cannot be defined in FI as an account. Cost element category determines which cost elements can be used for which business transactions.

Following are the primary cost element categories. » Read more: Cost Element Master in SAP

Activity Type Master in SAP

Activity Type describe the activity carried out by production cost center and are measured in units of time or quantity.Activity type is defined to collect activities performed in Cost centre with respect to work center.

Following are the activity type categories example defined in SAP.

1.    Setup
2.    Machine
3.    Labour » Read more: Activity Type Master in SAP

Cost Center Master Data in SAP

Cost Center represents a defined location of cost incurrence for cost controlling. Cost Center definition can be based on Functional Requirements, Physical Location and Responsibility for Costs. The Cost Center can be grouped according to the reporting requirement of the organization through standard hierarchy.

In order to analyze overhead cost, Cost Center is required to be entered at the time of FI transaction entry in SAP. Each Cost Center will be linked to a Profit Center. Cost Center will facilitate product costing, profitability and overhead analysis for organization. » Read more: Cost Center Master Data in SAP