TERP10 - Unit 4: Management Accounting Basics (Day two)

List the true cost objects

1. Cost centers 2. Real Internal Orders 3. Real Projects 4. Networks 5. Cost Objects 6. Profitability Segments

True cost object

1. Department 2. Project 3. Fixed Asset 4. Material

Human Capital Management

____ can generate cost postings in Management Accounting and offers you the opportunity to allocate labor costs to various controlling objects.

Company Code

Independent accounting unit. You prepare financial and profit and loss (P&L) statements at the company code level to meet legal reporting requirements.

Explain the posting logic between Financial Accounting (FI) and Management Accounting

** Cost and Revenue Element Accounting 1. Overhead Cost Controlling 2. Product Cost Controlling 3. Profitability Analysis ** Containers 4. Cost Center 5. Internal order 6. Profitability Segment 7. Process ** Profit Center Accounting 8. Profit Center

Which of the following can be represented by a profit center in SAP?

1. An organization unit within the company. 2. A line of business. 3. A geographical location.

Currencies used in Management Accounting (3)

1. CO area Currency - Controlling Area 2. Company Code Currency or Object Currency 3. Transaction Currency

Currency in management accounting

1. Controlling Area Currency 2. Transaction currency 3. Company code or object currency

Which of the following are the three types of currencies that can be used in SAP Management Accounting?

1. Controlling area currency. 2. Company code currency or object currency. 3. Transaction currency

These are true about fixed values and total values of statistical key figures.

1. Fixed values are valid as of the posting period and in all subsequent posting periods of the fiscal yr. 2. Total values are valid only in the posting period in which they are entered.

Which of the following fields are required to create a cost center in management accounting (CO)?

1. Hierarchy Area 2. Company Code

You are currently working on cost center planning in SAP ERP Management Accounting. Which of the following can serve as inputs to cost center planning?

1. Manual Entries 2. Formulas 3. HCM planning

Management Accounting Organizational Units

1. Operating Concern 2. Controlling Area 3. Company Code 4. Plant 5. Purchasing Org/Sales Org

Identify the organizational levels that are relevant to management accounting

1. Operating Concern 2. Controlling Area 3. Company Code 4. BA 5. Plant 6. Purchasing organization 7. Sales organization

What are the 4 typical uses of internal orders?

1. Overhead orders (used to monitor costs incurred for a particular purpose such as conducting trade fairs or tracking maintenance or repair work) 2. Investment orders (used to monitor costs incurred during the construction of assets such as building a storage facility) 3. Accrual orders (used to offset postings of accruied costs in CO) 4. Orders with Revenue (used to replace the cost accounting parts of SD customer orders if SD is not being used)

You are preparing an assessment in SAP ERP Management Accounting. Which type of cost element is used to perform an assessment?

1. Primary 2. Secondary

Your colleagues have asked you assistance in explaining product cost controlling in SAP ERP Management Accounting. You begin by explaining the different components of product cost controlling. Which of the following will you say are components of product cost controlling?

1. Product cost planning. 2. Cost object planning. 3. Actual costing/material ledger

Components of Management Accounting/Controlling (5)

1. Profitability Analysis 2. Profit Center Accounting 3. Overhead Cost Controlling 4. Product Cost Controlling 5. Cost Element Accounting

List the functions of management accounting

1. Profitability Analysis - How Profitable? 2. Profit Center Accounting - In Which area? 3. Overhead costing controlling - Where? Ex. Lights 4. Product Cost Controlling - For what? (projects, materials, COGS) 5. Cost Element Accounting - What costs?

An Internal Order is an extremely flexible tool in SAP ERP Management Accounting that can be used for a wide variety of purposes to track costs and, in some cases revenues, within a controlling area. Which of the following order types are internal orders?

1. Result analysis orders for posting accrual costs in CO. 2. Capital Investment orders for creating assets. 3. Maintenance orders

You are about to create a statistical key figure to help with the distribution of costs in SAP ERP Management Accounting. Which of the following are examples of fixed (Type 1) statistical figures?

1. Square footage of a building 2. Number of network connections

CO document attributes (3)

1. The CO object that was posted to 2. The Cost Element Used 3. The Amount posted

In cross-company code cost accounting, all of these are true.

1. The controlling area and the company codescan have different currencies. 2. The currency of the controlling area can be the same as that for a company code. 3. The currency of the controlling area can differ from the currency of all the companycodes assigned to the controlling area.

A client has asked you to explain the use of currencies in SAP ERP Management Accounting. What currencies will you say can be used in management accounting?

1. Transaction 2. Object Currency 3. Controlling Area

You want to plan costs on internal orders in SAP ERP Management Accounting. Which of the following options are available to you to plan costs on internal orders?

1. Unit costing. 2. Primary and secondary costs. 3. Overall planning

Internal order

A self-contained mini project cost object, i.e. it's a collection of costs, but not a full project with WBS and network relationships. The Internal Order should settle to Fixed Asset, Project, Cost and/or Profit Centers at the accounting period (month) end.

True (real) objects

Act as the sending or receiving objects during cost allocation. Examples include Cost Centers, real internal Orders, Real Projects, Cost Objects, etc.,

Product Cost Controlling

An area within Product Cost Controlling (CO-PC) where you can plan costs for materials without reference to orders, and set prices for materials and other cost accounting objects. You can use Product Cost Planning to analyze your product costs, such as for: Manufactured materials Services

Profitability Segment

An element of an operating concern which is formed by a number of characteristics. Each intersection corresponds to a profitability segment (each combination of characteristics is a profitability segment).

Sales organization

An organizational unit that is used in sales order management.

Purchasing organization

An organizational unit used in MM - purchasing

You are updating the standard price of a material. Which of the following actions must be performed to successfully update the standard price?

Analyze the costs, marking, releasing

A secondary cost element is linked to a G?L account to ensure that expense posting pass to CO. True or False.

Answer: False A primary cost element is linked to a G/L account. A secondary cost element is used within CO to allocate costs between objects.

When allocating cost centers using assessments, the original cost elements are used to track the movement from sender to receiver. True or False

Answer: False Periodic reposting and distribution used the original cost elements while assessments use secondary cost elements.

The FI module is the only source of expense and revenue postings in CO. True or False

Answer: False Sales and Distribution, Materials Management, and Human Capital Management can also transfer expense and revenue postings to CO.

What are business areas (BA)

Business areas (BA) can be used to group strategic business units for reporting profit loss and financial statements (not suitable for auditing, suitable for reporting purposes only)

Cost Center

Can allocate these costs to other cost centers, internal orders, and processes in Activity Based Costing (ABC)

Statistical Objects

Cannot allocate costs to other objects, but can be used to make a statistical account assignment to any number of cost accounting objects. Examples include Statistical Orders, Statistical Projects and Profit Centers. Profit Centers are ALWAYS statistical objects.

Management Accounting

Contains all the functions necessary for controlling cost and revenue effectively and is used internally. (Internal, FI is external - only cares if money is leaving the company) - You can assign more than one company code to a CO area.

What us the basic organizational units relevant to management accounting?

Controlling Area and operating concern

In cross company code cost accounting, a CO area and its company codes can have what?

Different currencies

Perform actual postings to Management Accounting

FI Data Entry: Items FI Document: GL Account (P&L and Balance Sheet) CO Document: Controlling object - Co object that you posted to - The cost element that you used - The amount that you posted There is no corresponding credit entry in the CO document. When a primary cost is initially posted in CO, it is treated as one-sided journal entry, unlike a conventional balanced FI journal entry.

Human capital management (HCM)

Generates cost postings in Management Accounting. - Allocates labor costs to various controlling object. - Transfer and use planned personnel costs for planning CO.

BA

Groups strategic business units for reporting financial and P&L statements. Not suitable for auditing; only suitable for reporting. Groups business units that are associated with different company codes.

Statistical postings are for what?

Information purposes only.

To enable ______________, you need to specify which Cost Center provides which Activity Types at what price.

Internal activity allocations

What is the difference between marking a standard cost estimate and releasing a standard cost estimate? ________________

Marking enables the results of the standard cost estimate to be updated in the future standard price in the material master. Releasing a standard cost estimate enables the future standard price to be updated as the Current standard price and the Current planned price in the material master.

Materials Management

Materials Management, a good issue transaction can create a cost posting in Management Accounting to whichever cost object is specified. Product cost estimates created in Management Accounting can update price fields in material master records. Finally, the creation of purchase orders in Material management can generate commitment posting within Management Accounting.

Allocating values in Management Accounting can affect what?

More than one company code.

List the two organizational unit defined in Controlling. ___________ and _____________

Operating Concern and Controlling Area

Which Organizational Structure is required if you want to use Profitability Analysis?

Operating concern

ABC

Pass costs to cost centers and internal orders. Internal orders can settle costs to cost centers, processes in ABC, and other internal orders.

Overhead Cost Controlling (CO-OM)

Posting costs to cost centers, internal orders, and processes from other SAP ERP applications (external costs).

A _____________ allows organizations to create financial statements for organizational structures defined internally.

Profit Center

Which of the following is a statistical controlling object?

Profit center

Which of the following management accounting (CO) components requires an operating concern?

Profitability Analysis

Product Cost Controlling

Provides tools for a comprehensive analysis of the value-adding processes in an enterprise.

Profitability Analysis

Receive cost assessments from cost centers and ABC processes, settlements of costs from internal orders, and settlements of production variances from cost objects.

Cost objects

Receive direct cost postings from FI, costs from cost centers, and costs settled from internal orders, and costs allocated from ABC professes.

Profit Center Accounting (EC-PCA)

Receives statistical cost postings from all the other components of Management Accounting.

Plant

Represents a production unit and is the central organizational unit in materials management (MM) and production planning (PP). Plant is assigned to a company code.

Sales order management is a primary source for _______ in profitability analysis (CO-PA) and Profit Center Accounting (EC-PCA)

Revenue postings

Sales order management is a primary source for what?

Revenue postings from billing documents to revenue postings in CO-PA and EC-PCA.

What type of cost element do you use when passing costs from a sender to receivers utilizing an assessment?

Secondary Cost Elements

Controlling Area

The basic organizational unit in Management Accounting. It is a closed entity that is used for cost accounting. You can allocate costs only within a CO area. These allocations don't affect objects in CO.

Operating Concern

The central organizational unit in Profitability Analysis (CO-PA). It represents the structure of external market segments for the enterprise. You can assign several CO areas to each operating concern so you can analyze them together.

Operating Concern

The central organizational unit in Profitability Analysis (CO-PA). It represents the structure of the external market segments for the enterprise. Can have several CO areas assigned to it to analyze together.

What are the requirements for assigning multiple company codes to a controlling area.

The company codes must have the same operating chart of accounts and the same fiscal year variant.

Describe the goal of Profit Center Accounting.

The goal of profit center accounting is to measure the profitability of areas of responsibility within the organization.

Describe the goal of Profitability Analysis.

The goal of profitability analysis is to determine the profitability of market segments

A controlling area can have only one standard hierarchy. (True/False)

True

Profitability Analysis (CO-PA) is used with the operating concern. a. True b. False

True

Profits can be combined in order to find the true profitability. True or False.

True

Cost and Revenue postings to CO can result in what?

True and statistical postings.

By assigning more than one company code to a CO area, you can do what?

You can perform cost accounting for all company codes.