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Global Bike: Understanding The Integrated Cost Center Accounting Process

676 Words3 Pages

The main intention of this exercise is to understand the integrated cost center accounting process and helps in grasping the SAP functionality in each step of the processes where the cafeteria costs of Global Bike are assessed. The integral part of the controlling segment, which controls the costs of the organization is known as a cost center. The cost center in SAP maintains and helps to track the cost the occurs in every department of an organization. The costs that occur in the organization can be collected based on the department, product person responsible, or area. It is also responsible for planning, cost analysis and to generate the variance analysis report. The department should be mentioned while creating the cost element to categorize them according to production, service or sales so as to assign cost center to respective profit center and the center hierarchy. The first in this …show more content…

The fixed values allow all the defined values to be posted in full fiscal year, whereas the total values allow the values to be posted for only defined periods. The Cost element accounting creates and maintains the ledger account by collecting details of the cost and encapsulates it in the controlling segment. The value that is assigned to utilities, material consumption is recorded at the controlling area is termed as cost element. The secondary cost elements are used to define the flow of cost while calculating the overhead cost, internal activity allocations or assessment within the controlling segment. The following step involves the creation of the secondary cost element to allocate the activity and internal cost flow. Activity types are created next to organize the cost center, according to the activities that are performed which will be used in the allocation of internal

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