Cost Setup – An overview

Introduction

As the basic requirement of Cost Controlling, one should be able to identify the costs as and when they are generated, and accumulate them against distinct areas of responsibilities, against their casual entities, or into any other pools as required by the information needs of the organization. MAC defines the Cost Entities (cost centers, cost elements, and calendar) to which all the costs in an organization are assigned.

Cost Setup is the component that is used to define the organization’s costing model that helps in recording, analyzing and controlling costs. The definition of Master and Mapping entities define the Costing Model that the company wants to use. Business needs ideally determines the detail and accuracy of the model. Once defined, the model can be used by other components and Cost Setup performs the support function.

Master entities like MAC Calendars, Cost Center / Units, Cost Elements, Cost Center Structures and Cost Element Structures are created and maintained in the Cost Setup. Further the Mapping entities like Cost Center-Cost Element Mapping, Cost Element-Account Code Mapping are also defined and maintained in this component.

All components refer to the Cost Setup Component for validating the Master and Mapping Entities. Standard Rates for Cost Center-Activity Cost Element combinations are maintained here which is, in turn used by Discrete Production and other components in their activities.

Feature Highlights

• Create Cost Centers assigning user defined Cost Center Types

• Create Cost elements for a business unit to define primary cost/ revenue (normal), allocation and activity costs

• Generate primary cost/ normal cost elements from a range of accounts mapped for FBs within the BU

• Mapping cost center to a range of normal cost / allocation/ activity elements and also indicating the behaviour and traceability

• Define a basic activity element for a Cost Center and calculating the standard rate and Alternate rates for the activity cost elements

• Copy Calendars, Cost Centers, Cost Elements, Cost Center Structure and Cost Element Structure from one BU to another.

List of Activities