The Cost Source can be seen as the origin of the cost (or where the cost was raised). All cost sources are user defined. To be able to enter cost sources, it is essential that you understand how the company wants to follow up on its costs. For example, if the company wants to follow up on its labor costs per department (labor class), you might need to enter each department as a cost source.
You can use the Mandatory to Use Cost Sources check box on the Cost Details Basic Data window header, to make it mandatory to use cost sources in the system. You can remove cost sources at any time, provided they have not been connected to a cost source indicator or used elsewhere in the system.
The company must have been entered in the system.
Cost sources will become available to connect to cost source indicators. This will make it possible to follow up on costs based on the origin. Note: If the inventory valuation method is standard cost (and the cost level is per part), cost sources will not be taken into consideration or displayed on the cost detail lines.
If you selected the Mandatory to Use Cost Source check box, you will not be allowed to define a cost structure without a cost source.
If you selected the Use OH Accounting Year check box, every time a new cost detail line of type overhead is created, the accounting year will show the financial year in which the overhead cost was applied. This enables you to later on adjust overheads applied in your company during a specific year.
Basic Data for Cost Details, Basic Data for Cost Details/Cost Source