Hello Hans,
Can you please refer to the help center document : Defining Advanced Approval Limits
This document will provide you the details on the how system will work and what is cost center level.
Basically Cost center level is the Cost Center Hierarchy (in the org structure).
I hope this will answer to your queries. Let me know if you need further clarifications.
If this resolves your concern. Please mark this thread as answered.
Regards,
Harshal