Showing results for 
Search instead for 
Did you mean: 

Cost Center Identification

Former Member
0 Kudos

Hi All,

My Client is a manufacturer and they are implementing SAP ECC 6.0. They have not used Cost Center concept before. Pls let me know how to identify cost centers . is there any hard and fast rule for identifying cost centers?



Accepted Solutions (0)

Answers (1)

Answers (1)

Former Member
0 Kudos

Hi ,

This is a Basis of Controlling which requires understanding of Costing Functions.

Initially before you configure this is require to finalise with client.

For Example;-

In a Manufacturing Unit,

It will have ,

1. Manufacturing Group Cost Center - will have individual cost centers for different Function

2. Service cost Center Group - Will have Service Cost Centers for Different Service Function

3. MKTG, ADMN others as required by client for reporting and also for overhead allocation.

4. Finally this will help for better controlling of cost as well as reporting for profit center accounting



Former Member
0 Kudos


Cost center identification or definition is freely definable (upto client, how they do the analyze cost in high level). The motto behind is, you need to analyze the costs where and how they occur at certain base, this base could be cost center (functional area:- where the functions are delivered for certain purpose incurring the costs).

Basically costs center defines based on the fictional areas, such as Finance, Administration, Maintenance/Service, R&D cost center, Production planning and Production operation (this could be more depends on your production activities how you want analyze and report the information.

Hope I am able to meet your expectations.