Co Product - settings for SAP costing

Co-product: 1. Material master – MRP/costing view (tick the co-product indicator) for all the co-products.(for leading product also select co-product indicator in BOM) 2. If you want to use net net realizable value and not apportionment structure - in material master – material view – tick fixed price co-product. 3. Material cost estimate with quantity structure determines the quantity structure using the master data of the leading co-product. 4. In BOM of leading co-product – Byproducts(costed using net realizable value) will be in negative quantity 5. Non leading co-products also have negative quantity – but they are indicated in BOM item data by the “joint production” indicator.

6. The non leading co-products are linked to the leading co-product in the production version

Costing of co-product 1. For fixed price co-products – use net realizable value method with fixed price / net realizable value method with cost component split. 2. Use apportionment structure to calculate COGM for each primary product.(apportionment structure can be in material master or in process order) 3. The total costs of the process are ar e allocated to the co-products for e ach cost component suing equivalence number. 4. Apportionment structure(AS, costing lot size, costing parameters ar e taken from leading material) – list all co-products to which costs should be apportioned and assign equivalence numbers. Source assignment of a source structure is maintained here. 5. Co-products are designated in the itemization with item category A and will have negative quantities. (By products  – M) 6. Cost each co-product (and ensure all the co-products are selected). 7. If A is leading co-product, then B has to specify that product A is the header material, which contains quantity structure data. 8. For each co-product (including the leading product) the system ge nerates an order item and turns on the “multi items” indicator

9. Steps: a.

Create process order, scheduling, sc heduling, availability check, preliminary costing, release of  order, simultaneous costing, material withdrawl, confirmations

b. GR c.

Overhead costs / process costs

d. Revaluation e. Preliminary settlement of co-product

f.

WIP calculation

g.

Order delivered

h. Variance calculation i.

Settlement

 j.

Archive/delete

10. Maintain apportionment structure in process order, (equivalence numbers) 11. When process order is created – check the following a.

Whether on the basis of apportionment structure, settlement rule is created or o r not(both in the preliminary cost estimate and in the actuals)

b. Whether settlement rule for every item is created or not 12. Use a source structure, for getting different equivalence numbers depending on the posted cost elements (ex: material costs to co products in the ratio 3:2 and overhead costs in 1:1) 13. Check in settlement profile: - t ick mark for equivalence umber or % se ttlement 14. Unless apportionment structure is maintained in master data, source structure cannot be used 15. WIP for co-products is to be valuated at actual cost; wip to order (e xcludes credits from GR) 16. WIP is calculated for Co-products till header becomes DLV or TECO 17. WIP accrual to FI doesn’t credit process order. WIP balances are stored in RA keys. 18. In the case of manufacturing orders that have co-products and whose order item has settlement type FUL, variances can c an only be calculated when all order items have been delivered 19. For manufacturing orders that have co-products for whose order item the settlement type is PER, the order balance is always interpreted as a variance 20. No scrap variances can be calculated for co-products (so use variance key for which scrap indicator is not set. 21.