Unit 4 - Management Accounting

Plant

represents a production unit and is the central org unit in MM and PP; is assigned to CoCd

Business Areas

used to group strategic business unit for reporting P&L and financial statements; can be cross-CoCd

Currencies in Management Accounting

- CO area - Company Code(object) - transaction

The steps in an order are

- Create order - Release order - Goods movement - Confirm order completion - Settle order

Each CO document contains

- a unique number - CO object that you posted to - the cost element that you used - the amount that you posted

Secondary cost elements

- defined only in CO and are used for internal CO allocations (assessments or settlements) - do not have any corresponding G/L accounts in FI.

In Actual costing and Material Ledger

- the standard price is analyzed - a new price is marked based on what the new standard price should be

Standard hierarchy

A tree structure that holds all profit centers in a controlling area and reflects the organizational structure used

Multiple assignments of Company Codes

By assigning multiple CoCds to a CoArea, cost accounting can be performed for all CoCds. Values in CO can be allocated that affect more than one CoCd

Organizational Data specific to CO

Controlling area, operating concern(CO-PA)

CO-PC consists of

Product Cost Planning Cost Object Controlling Actual costing and Material Ledger

Components of Management accounting

Profitability Analysis(COPA), Profit Center Accounting(), Overhead Cost Controlling(CO-OM), Product Cost Controlling(CO-PC), Cost Element Accounting

The standard price for the material is updated when

a standard cost estimate is marked and released

Profit Center Accounting(PCA)

allows an enterprise to calculate internal measurements of profitability; when active, various controlling objecrs are assigned to the profit center identified in that field which causes the system to generate a statistical posting

Company code

an independent accounting unit; prepare financial and P&L statements at this level to meet legal reporting requirements

Cost Center

an org unit in a CoArea representing a location where costs occur; used for differentiated assignment of overhead costs to organizational activities based on utilization of cost determination function and cost controlling function

True objects

can act as sending or receiving objects during cost allocations, can settle these with other CO objects; examples: cost centers, internal orders, projects, production orders

Profit Center

can represent many things such as an org unit within a company, a line of business, or a geographical location; a management-oriented org unit used for internal controlling purposes

Fixed value

carried over to each period for costing regardless how many units were consumed

Product Cost Accounting (CO-PC)

consists of planning the cost of production as well as tracking and analyzing the actual costs

Management accounting

contains all the functions necessary for controlling cost and revenue effectively

By assigning multiple CoCds to a COArea,

cost accounting can be performed for all CoCds

Statistical key figures

define some measurable value application to cost centers, profit centers, internal orders, or processes; can be defined as fixed value or totals value

Purchasing Organization

org unit used in MM-purchasing

Sales Organization

org unit used in Sales Order management

The aim of CO-PA is to

provide the board of directors, sales and distribution, marketing, planning and other groups with market-oriented decision support

Controlling Area

the basic org unit in CO; a closed entity that is used for cost accounting, only place where you can allocate costs

Operating concern

the central org unit in Profitability Analysis; represents the structure of external market segments for the enterprise; can assign several CO areas to each one so you can analyze them together

For direct activity allocation

the quantity of the activity to be allocated is entered manually

To assign accross Company Codes, a CO area and its company code must use

the same operating COA and same fiscal year variant

When the system creates an FI document that posts to an expense or revenue account,

the system also creates a CO document

Once a future standard price is determined,

the third step, Release, allows the current price to become the new previous price and the future price to become the new current price; known as price update

Totals value

those that are based on how much was actually consumed; based on how much was actually expensed

The goal of Profit Center Accounting (CO-PCA)

to measure the profitability of areas of responsibility within the organization

Cost and revenue posting to CO can result in

true and statistical postings

Statistical objects

used for information purposes only, cannot allocate costs to other objects