The cost element category is a technical control function. It determines whether you can post to a cost element directly or indirectly.
Direct posting means a fixed amount is posted to an account by specifying the account number.
You can post directly to all primary cost elements. A cost center is an organizational unit in a controlling area representing a clearly delimited location where costs occur. ABC assigns costs to business processes based on their use of resources. ABC recognizes the causal relationship between cost drivers and business processes. This will helps to control the moving average price from wide fluctuations as the moving average price is update before any goods is issue out to customers.