An organizational unit within a controlling area that represents a defined location of cost incurrence. The requirement at Greaves is to capture the costs Department wise. Cost centers would be divided into main groupings:
- Administration Cost Centers
- Selling & Distribution Cost Centers
Profit Centre can be created using KE51, changed with KE52 and displayed with KE53.
A profit center is an organizational unit in accounting that reflects a management-oriented structure of the organization for the purpose of internal control. We can analyze operating results for profit centers using either the cost-of-sales or the period accounting approach. By calculating the fixed capital as well, we can use our profit centers as investment centers.