Hi Surendra,
Let me try to explain the concept here. So value categories are defined in configuration and is helped to classify the costs accumulated in a work order in terms of broad categories such as Internal labor cost, Material Cost, External services cost. So this helps in doing the reporting based out of value categoies. For example you want to know in last quarter what is the total amount expensed on a particular work order type on Material Cost.
Now next question will be how the costs get accumulated in the value categories. This is done when someone does labor confirmation or say goods issue etc. Now whenever goods issue or labour confirmation is done a particular G/L account gets hit which simultaneoulsy updates the cost element. Cost element group is nothing but a collection of cost elements. Generally we create a cost element group using transaction KAH1 and then assign different cost elements there. So no cost flow as such happens between cost element and cost element group. It's just a representation for a set of cost elements.
Concept wise cost elements are just corresponding revenue and expense elements in G/L account.
So in configuration, we assign cost elements to the value categories and hence from cost elements the costs get grouped in value categories.
Now the sum of cost of all value categories in a work order get accumulated in the order. This can then be settled to a corresponding settlement object say a cost element or a WBS element etc. So now the cost flows from the work order to settlement receiver.
Hope this helps!
Thanks,
Tajinder