What is primary costs in SAP CO - Controlling?

SAP Term: primary costs

• Component: CO

• Component Name: Controlling

• Description: The costs incurred through the consumption of goods and services that originate from outside the company that is, from the procurement market.

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• Key Concepts: 
  Primary costs are costs that are directly related to the production of a product or service. In SAP Controlling (CO), primary costs are the costs that are directly associated with the production of a product or service, such as raw materials, labor, and overhead. 
  
  How to use it: 
  In SAP Controlling (CO), primary costs can be tracked and monitored using cost centers and cost objects. Cost centers are used to track the costs associated with a particular area of production, such as a factory or department. Cost objects are used to track the costs associated with a particular product or service. 
  
  Tips & Tricks: 
  It is important to accurately track and monitor primary costs in order to ensure that the production process is efficient and cost-effective. It is also important to ensure that all primary costs are allocated correctly in order to ensure accurate financial reporting. 
  
  Related Information: 
  Primary costs can be contrasted with secondary costs, which are indirect costs associated with the production process, such as administrative expenses and marketing expenses. In SAP Controlling (CO), secondary costs can be tracked and monitored using cost elements.