What is consumption cost element in SAP CO-PC - Product Cost Controlling?

SAP Term: consumption cost element

• Component: CO-PC

• Component Name: Product Cost Controlling

• Description: A cost element under which a cost object such as a production order is credited. The consumption cost element is the cost element that corresponds to the inventory change account in the income statement.

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• Key Concepts: 
  A consumption cost element is a type of cost element in SAP Product Cost Controlling (CO-PC). It is used to record the costs of materials and services that are consumed in the production process. Consumption cost elements are used to track the costs of materials and services that are used up in the production process, such as raw materials, energy, and labor. 
  
  How to use it: 
  Consumption cost elements are used to record the costs of materials and services that are consumed in the production process. They can be used to track the costs of raw materials, energy, and labor. Consumption cost elements can be assigned to cost centers or orders, and they can be used to calculate the total cost of production. 
  
  Tips & Tricks: 
  When setting up consumption cost elements, it is important to ensure that they are correctly assigned to the appropriate cost centers or orders. This will ensure that the correct costs are recorded and tracked. Additionally, it is important to ensure that all relevant costs are included in the calculation of total production costs. 
  
  Related Information: 
  Consumption cost elements are part of SAP Product Cost Controlling (CO-PC). Other components of CO-PC include overhead cost elements, which are used to record overhead costs such as rent and utilities; and activity-based costing elements, which are used to track the costs associated with specific activities or processes.