A cost component is a user-defined category for the classification of costs.
Cost components have the following functions:
- To break down an item's standard cost, sales price, or valuation price.
- To create a comparison between the estimated production order costs and the actual production order costs.
- To calculate production variances.
- To view the distribution of your costs over the various cost components in the Cost Accounting module.
Cost components can be of the following cost types:
- Material Costs
- Operation Costs
- Surcharge on Material Costs
- Surcharge on Operation Costs
- WIP Transfer Costs
- General Costs
Note
If you use Assembly Control (ASC), you cannot use cost components of the General Costs type.