What is target costs in SAP CO-OM-CCA - Cost Center Accounting?

SAP Term: target costs

• Component: CO-OM-CCA

• Component Name: Cost Center Accounting

• Description: The costs that are expected to arise in connection with the performance of a particular activity. Target costs are calculated using the planned costs for the cost center and the planned costs for the activity to be performed. The target costs are then compared with the actual costs for the period.

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• Key Concepts: 
  Target costs are a type of cost center accounting in SAP. They are used to plan and monitor the costs of a cost center. Target costs are set up in the system and can be compared to actual costs to determine if the cost center is meeting its goals. 
  
  How to use it: 
  Target costs can be set up in the SAP system by entering the target cost amount for each cost element in the cost center. The system will then compare the target cost to the actual cost and display the difference. This allows users to monitor and adjust their cost center performance. 
  
  Tips & Tricks: 
  When setting up target costs, it is important to consider the time frame for which they will be used. Target costs should be set up for a period of time that is long enough to allow for meaningful comparison between actual and target costs. 
  
  Related Information: 
  Target costs are part of the Cost Center Accounting (CO-OM-CCA) component in SAP. Other components related to CO-OM-CCA include Cost Object Controlling (CO-OM-COC) and Activity-Based Costing (CO-OM-ABC).