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What is Cost Object?

Former Member
0 Kudos

Hi All

What is Cost Object?

Thanks

Ramakanth

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

For internal cost monitoring & budgetting purpose there r various cost objects are provided..like Cost center, Internal Order, WBS elements etc.

When ever a expense is posted and if it is relavent to one of the cost object then a parallel posting is done on Cost object apart from GL posting

Hope this helps.

Venkat

Answers (3)

Answers (3)

ankitjadhav4
Discoverer

Cost Objects are nothing but the controlling objects e.g Cost Centers, Sales Order, Service Order which we can assign to General Ledger FI postings to later analyze cost and revenue.

Without Cost Objects I will say I am giving 20K rent to both of my office A&B.

With Cost Objects, you can say for office A, I am paying 15K and for office B, I am paying only 5K. I got this information because I had assigned cost centers A & B to offices A and B respectively.

I will now decide to shut the office A. Well that's the beauty of cost objects.

former_member674271
Contributor

Hi Ramakanth,

Cost object is the one of three characters for define a cost event, they are,

What type of the cost

Where the cost happend

How much is the cost

So the Cost Object explains where the cost happens. The other two are cost element and amount respectively.

SAP has many cost object types like cost center, internal order, profit segment, WBS element, product cost collector etc. Some can be real cost objects while some can be statistical cost objects. The real cost object collect real cost and the cost in it can be allocated to other cost objects while statistical cost object collect cost for statistics purpose and of course can not be allocated.

Former Member
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Any (excluding e.g. tax and dividends) posting to a GL account in the income statement range, will be reflected in COntrolling as well. When a posting is made in CO, it also needs to go to a cost object. E.g. a cost centre, or production order. If the cost is for a project, the cost object is usually a WBS element.