The cost category diagram is used in process cost management, for example, with ARIS Optimizer. They illustrate the hierarchy of cost categories.

Cost categories serve to systematically structure all costs that arise from the creation and utilization of cost objects. The question is: What costs have been incurred?

For example, material costs are the cost category for the consumption of materials, and depreciation is the cost category which records the decline in value of assets.

The total costs can be structured according to different criteria. Distributing costs according to the type of production factors consumed results in the following classification: personnel costs (for example, salaries, commissions), material costs (for example, costs of raw materials, depreciation of machines), capital costs, costs for third-party service providers (for example, transport costs, electricity costs), as well as costs for taxes, fees, and contributions. Cost categories can be further divided according to the main operating functions, such as procurement costs, warehousing costs, manufacturing costs, administration costs, and sales costs. Both structures can be further refined.

The hierarchy of cost categories is illustrated in the cost category diagram by directed connections of the is superior type.

An important attribute for cost categories is performance scale. It describes the unit in which cost category performance is measured (for example, hours for wages and square meters for occupancy costs).

The following figure illustrates an example of a cost category diagram according to the above-mentioned classification based on the type of production factors consumed, also showing the substructure of the personnel costs.

The cost category diagram visualizes the dependencies between cost categories. This hierarchical arrangement can be a part of a calculation in ARIS Optimizer. For example, you can configure ARIS Optimizer in such a way that the calculated costs of each cost category are aggregated according to the hierarchy in the cost category diagram.