
Overhead Cost Accounting (J54)
This scope item covers transaction-based actual postings that are used in overhead cost controlling. The purpose of overhead cost controlling is the planning, allocation, control, and monitoring of overhead costs.
Cost center accounting takes the costs incurred in a company and allocates them to the actual subareas that caused them. During period-end closing, these costs are distributed to cost centers through automatic allocation. By allocating the cost elements to cost centers in overhead cost controlling, you can control your costs and compare plan and actual costs. The plan/actual comparison at the end of the period helps you to plan, control, and monitor cost behavior. Overhead cost controlling is also a prerequisite for further allocating overhead costs to cost objects (CO-PC), which enables you to conduct a period-specific profitability analysis.
Key Process Steps Covered
- Record primary costs to cost centers by posting journal entries with reference to a cost center
- Update cost center with the correct values
- Post statistical key figures (for use in reporting or as tracing factors for period-based allocations)
- Distribute primary and secondary costs using an assessment cost element
- Run the cost centers actual data reporting
- Reassign costs and revenues
- Analyze allocation flow
- Maintain and monitor your cost center budget (optional)
- Transfer cost center budget
Benefits
- Get a transparent view for an account of a cost center
- Process a journal entry for various purposes
- Determine availability of steps required for preparing periodic and year end activities
- Determine necessary steps for preparation of periodic and year end activities
- Track commitments posted on cost centers
- Experience no undesired budget over runs and full transparency of the consumed and available budget at any time
Where is Overhead Cost Accounting(J54) being used?
This Scope item is used in the following way:
- As a management function of Cost Management and Profitability Analysis within Finance Scope Item Group