SAP ERP Financials and FICO Handbook

68 CHAPTER 1 INTERVIEW QUESTIONS AND ANSWERS
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Cost Element Accounting (CO-CEL)—CEL describes the costs that occur within
an organization. It classifies them on the point of occurrence: (1) primary cost
element, (2) revenue cost element, and (3) secondary cost element.
Product Cost Accounting (CO-PC)—This is used to estimate what it will cost to
produce a product (or a service). It also has capabilities to track the actual costs
of production, and provides extensive tools for cost analysis.
Profitability Analysis (CO-PA)—Very often, management is interested in knowing
which products and which geographical areas are performing well. This module
provides this information to management.
CO-PCA—This module tracks cost and revenue from the point of responsibility
accounting.
152. True or False? Activity-based costing (ABC) is primarily used to capture
the costs of internal events, such as travel costs and trade fairs.
False. ABC is a sub-module of controlling, which captures cost and usage of
resources at each and every activity for further analysis. Whereas an IO is used to
capture cost, related to a particular event or product.
153. True or False? PCA is generally used for margin reporting and cost of
sales accounting.
False. PA is used for margin reporting and cost of sales accounting. PCA is used for
period-based accounting and complete financial statements.
154. What is the primary integration point between the CO and FI
modules?
G/L expense accounts are the primary cost elements in CO. Primary cost element is
the carrier of cost within CO. Every primary cost will have a G/L account, therefore
the relationship between primary cost element and G/L account is 1:1.
155. What are the differences between business areas and profit centers?
Business areas and profit centers are both used for management reporting, i.e.,
internal purposes only. The main differences are:
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A profit center is a master data, whereas a business area is not.