What is hierarchy area in SAP CO-OM-ABC - Activity-Based Costing?

SAP Term: hierarchy area

• Component: CO-OM-ABC

• Component Name: Activity-Based Costing

• Description: Contains one or more business processes or one or more nodes of the standard hierarchy in . Authorizations for SAP system users can be issued for individual hierarchy areas.

Smart SAP Assistant

• Key Concepts: 
  A hierarchy area in SAP is a structure used to group cost objects in the Activity-Based Costing (CO-OM-ABC) component. It is used to define the cost objects that are to be included in the cost calculation. The hierarchy area is made up of nodes, which are organized into a tree structure. Each node can contain one or more cost objects, and each cost object can be assigned to multiple nodes. 
  
  How to use it: 
  To create a hierarchy area, you must first define the nodes and their relationships. This is done by creating a node structure in the CO-OM-ABC component. Once the nodes have been created, you can assign cost objects to each node. This will allow you to group related cost objects together for easier analysis and reporting. 
  
  Tips & Tricks: 
  When creating a hierarchy area, it is important to consider how the nodes will be used. For example, if you are creating a hierarchy area for product costs, you may want to create separate nodes for each product type or product line. This will allow you to easily analyze and report on costs for specific products or product lines. 
  
  Related Information: 
  For more information on creating and using hierarchy areas in SAP, please refer to the SAP Help documentation on Activity-Based Costing (CO-OM-ABC).