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