SAP CO Cost Center - SAP FICO

What is a Cost Center in SAP CO?

The component of the organization which directly adds to the organization costs and indirectly adds to the organization profits is known as a Cost Center, for instance, Marketing and Customer Service.

The business units of a company are classified into three different ways:

  • Profit center,
  • Cost center, or
  • Investment center.

The simple and straightforward division in an organization can be classified as cost center because cost is easy to measure.

Cost Center Hierarchy

The hierarchy of the Cost Center appears as follows:

Cost Center Hierarchy

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