Technical Object Cost Center and Work Center Cost Center
Objective:
The main objective of this blog to explain SAP PM beginners to understand the difference between Technical Object Cost Center and Work Center Cost Center with a live example.
Pl. Note : This document is based on particular configuration where the settlement of the work order goes to Equipment Cost Center.
Technical Object Cost Center:
Technical Object cost center are referred as cost receivers and Work Order Cost will be settled to this cost center.
Work Center Cost Center:
Work Center Cost Centers are used to calculate the cost of the work done (Labor Work). This is the responsible cost center for the work order. This also requires assignment of cost center in the work center and maintaining the Activity Pricing.
Maintenance Order:
Maintenance Order is created and planning is done for labor hours with a requirement of 8 Hrs.
Operation Line Item Should contain all the Fields highlighted in yellow.
Activity Price (KP26):
Activity price is maintained in combination with Cost Center and Activity type.
Plan Cost:
Planned Cost = Total Work (Hrs) * Activity Price (KP26) / unit
= 8 * 10 = 80 USD
Actual Cost:
On confirming the Operation, Actual cost is generated.
Actual Cost = Actual hours Confirmed * Activity Price (KP26) / unit
= 6 * 10 = 60 USD
The cost of the labor utilized in the work order is calculated based on the Cost Center assigned to the work center.
Settlement rule generation:
With respect to the configuration, settlement rule is generated automatically once the work order is Technically Complete.
Settlement receiver is picked from Equipment Cost Center.
On performing the settlement, Work Order cost is settled to Equipment Cost Center. Below Screenshot is taken soon after executing KO88 transaction, which will display the cost flow is from the Maintenance order (Sender) to the cost center (Receiver).
Also you can see both the cost centers in the work order
1. Equipment Cost Center in Location Tab under Account Assignment
2. Work Center Cost Center in Additional tab.
Hi Maria,
Very useful document. expecting more like this in future ......
Have a nice day.
Siva-v
Thank you Siva
Very useful for all PM consultants. It explains clearly - settlement of order cost on cost center maintained under equipment master data.
Thank you Mukesh
Very useful document thanks for putting it down, It helps to understand well. 🙂
Thanks Surendra
Hi Maria,
Good document. Very Neat explanation.
Thanks Kiran... 🙂
you shattered my doubts into pieces, thank you Maria, thank you very much.
Thanks Harsh, Happy it has helped you.
Also pls Like and rate this document.
Hi maria,
It's well defined.
Regards,
PS R
Thank you PS R 🙂
Hi Maria,
Thanks for your document. Its very useful.
BR
Sam..
Thank you Duraisamy 🙂
Hi Maria,
Nice Document.. Thanks
Thank you Shubham 🙂
Good job Terence keep it up
Thank you Ravi 🙂
hi ,
can you send spro setting for assigning cost element under spro--setting for display cost.
Regards,
Ganesh
Thanks Maria,
Nice Document
Hi Maria,
Thanks Very helpful document easy to understand as i am beginner too
One query if we use any component for work order so that material cost will settle on which cost center.? whether it will be on Equipment cost center or PM Work center cost center.? need some clarity on this.
Thanks in advance
Hi Shrinivas,
It will settle to your Cost Centre in the Settlement rule.
In Standard Equipment Cost Centre will be transferred to Settlement, unless there is no custom enhanccement.
Regards
Terence
Hi Terence,
Thanks for your good example.
Would like to know at the end, if the ctr 1213 is the receiver, the ctr 1214 from the work center will not receive any charge. Is that right?
Bets Regards
PIerre
Hi Pierre,
Yes, right. CTR1214 in work center will be used to calculate the Cost of the Labor only. But the settlement will happen to the cost center in the settlement rule
Regards
Terence
Yes