How to define Standard Hierarchy in SAP?
You can create or change cost centers either using the relevant menu entry or directly in the standard hierarchy maintenance function.
Cost Centers that are created or changed from within the standard hierarchy have the status ‘Inactive’, that is, they are not handled as account assignment objects in Management Accounting. The assignments can only be checked and the cost center released once the cost center is ‘Active’.
If you want to assign a cost center to another hierarchy level, you can do this in the standard hierarchy maintenance by a simple reassignment of the cost center. In other words, you do not need to make changes to your cost center master data.
How to define Standard Hierarchy in SAP?
You can change assignments of the organizational units, company code, business area, or profit center during the course of a fiscal year only if the following conditions hold:
- The currency of the new company code is the same as the currency of the old company code.
- You have only posted planning data in the fiscal year
- The cost center is not assigned to a fixed asset, work center or HR master record.
IMG ⇒ Controlling ⇒ Cost Center Accounting ⇒ Master Data ⇒ Cost Centers ⇒ Define Standard Hierarchy
T-Code: OKEON
Click on” 
” -(Create)
- Write Group num & Description
Click on” ” -(Create)
- Click on Lower Level Group
- Put Group name & Description
- Click on “Save”
Now we can create cost center under This Group
Select this line item “
“
Click on “Create”
Then Select”Cost Center“
- Cost Center : Give Cost Center Number
- Name: Name of the Department
- Person Responsible: Give the resp Person name for that Dept
- Cost Center Category:Select the Dept from the popup
- Then Click on “Save” & Enter
Like wise we need to create cost centers for other Departments
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