The business object "Profit center" is an organizational unit in accounting that reflects a management-oriented structure of the organization for the purpose of internal control.
You can analyze operating results for profit centers using either the cost-of-sales or the period accounting approach.
By calculating the fixed capital as well, you can expand your profit centers for use as investment centers.
In profitability accounting at the profit center level, all costs and revenues from the profit-relevant logistic activities and other allocations are transferred as statistical postings to the relevenat profit centers.
The exchange of goods and services between profit centers can be valuated using the same valuation approach as in financial accounting or another approach (valuation using transfer prices, available in Release 4.0).