Overhead Cost Controlling

The key areas of Overhead Cost Controlling are:
Cost Element Accounting
Cost and Revenue Element Accounting details which costs and revenues have been incurred. Accrual is
calculated here for valuation differences and additional costs. Cost Accounting and Financial Accounting are
also reconciled in Cost Element Accounting. This means that the tasks of Cost and Revenue Element
Accounting stretch beyond the bounds of Overhead Cost Controlling.
Cost Center Accounting
Cost Center Accounting determines where costs are incurred in the organization. To achieve this aim, costs
are assigned to the subareas of the organization where they have the most influence.

By creating and assigning cost elements to cost centers, you not only make cost controlling possible, but also
provide data for other application components in Controlling, such as Cost Object Controlling. You can also
use a variety of allocation methods for allocating the collected costs of the given cost center/s to other
controlling objects.
Internal orders
Overhead Orders are internal orders used either to monitor overhead costs for a limited period, or overhead
incurred by executing a job, or for the long-term monitoring of specific parts of the overhead. Independently of
the cost center structure, internal orders collect the plan and actual costs incurred, enabling you to control the
costs continuously. You can also use internal orders to control a cost center in more detail. You can assign
budgets to jobs. These budgets are then monitored automatically by the SAP system to ensure that they are
kept to.
Activity-Based Costing
In contrast to the responsibility and function-oriented basis of Cost Center Accounting, Activity-Based Costing
provides a transaction-based and cross-functional approach for activity output in which several cost centers
are involved. The emphasis is not on cost optimization in individual departments, but the entire organization.