SAP ERP Financials and FICO Handbook

70 CHAPTER 1 INTERVIEW QUESTIONS AND ANSWERS
1.9 CO-CEL
159. What are the different types of cost elements? What is the difference
between primary and secondary cost elements?
There are two types of cost elements: (1) primary cost elements and (2) secondary
cost elements.
Primary cost elements are cost elements whose costs originate outside of CO.
These elements correspond to a G/L account in FI.
Based on usage, primary cost elements can be further divided into the categories
shown in Figure 1.38.
FIGURE 1.38
Primary cost element categories
Secondary cost elements are cost elements used to allocate costs for internal
activities. Secondary cost elements do not correspond to any G/L account in FI. They
are only used in CO and therefore cannot be defined in FI as a G/L account.
Secondary cost elements are divided into the categories shown in Figure 1.39.
FIGURE 1.39
Secondary cost element categories