The 123s of ABC in SAP

6INTEGRATED ACTIVITY-BASED COSTING WITH OVERHEAD ORDER ACCOUNTING

Chapter 5 stressed the responsibility accounting concept, focusing in detail on the optimization of individual cost centers and their combined usage with ABC. Cost centers are defined organizational units that are usually stable over an extended period of time. Therefore, cost centers can be an amalgamation of multiple events or occurrences for which detailed costs are required in order to perform analysis. For example, the Vehicle Fleet cost center may contain the costs for owning, running, and maintaining several hundred vehicles. Information on which vehicles are increasing costs may be desired. This analysis is not necessarily process related and is better defined as a view of the events that drive costs potentially captured within a cost center or across many cost centers. Analysis on each individual vehicle requires a cost object to represent this smaller pool or view of costs. To provide this more detailed information, overhead orders are utilized.

OVERHEAD ORDER CAPABILITIES

The SAP R/3 application contains many different types of orders. These orders are designed and utilized to support events in production, sales, plant maintenance, and overhead-related efforts. When focusing purely on overhead-related expenses, the internal order cost object is utilized. Internal orders capture expenses or revenues related to either overhead or investments. The investment focuses on internal assets and the allocation ...