Co-Product and By-product in Production

order
Hello Everyone,,
I wrote this document for basic understanding of Co-Product and By-Product in Production order.
Product manufacturing in industry same time other products that are usually manufactured together using one
production order. We called that Co product and By product
Co-Product: Co-product is a product, we getting this product while manufacturing finished material or main
material. Same material might be used in other material manufacturing process
By-product By-product is a product, we getting this product while manufacturing finished material or main
material. The material valuation of a by-product is always based on the price specified by price control in the
material master.
Creating a production order to manufacture co-products has the following advantages:
Main product and co-product(s) are settled to different receivers
Goods movements can be posted simultaneously for all product manufacturing in the order
1. By- Product.
Prerequisite

In BOM maintained negative quantity

, Then system automatically will pick as by product.

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Co-Product and By-product in Production order

Crete planned order and converted to production order

At time Production order confirmation, system automatically post as By-Product,
By-Product Movement type 531, See below picture

If the by-product is indicated as being relevant to costing in BOM, the total cost of the process is
reduced by the costs of the by-products

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Co-Product and By-product in Production order

The costs of by-products are calculated with the net realizable-value method. The costs of the byproducts thus represent a reduction in the costs of the primary product.
If you don't want to calculate the cost of the By-product then remove the Costing relevancy from BOM
Item detail
2. Co- Product
Prerequisite
In Material master MRP View 2 select the CO product

In BOM maintained negative quantity

for component.

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Co-Product and By-product in Production order

In BOM, item of the components detail select the CO product, if you not select the Co product in Item
detail system consider as By Product

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Co-Product and By-product in Production order

Crete Production order

Good movement of the Co Product,
In Co product no automatic good receipt happen
Go to MB31 and enter the Order
In Co product Movement type is 101. See below Pic

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Co-Product and By-product in Production order

You can calculate the cost of goods manufactured for co-products by using an apportionment
structure to allocate the total costs of the manufacturing process to the individual products involved
The apportionment structure is defined in the costing view of the material master for the leading
co-product click on joint production or in MRP2 view, Click on joint production and assigned
apportionment structure
In the apportionment structure, you can use equivalence numbers to control how the costs of the
entire manufacturing process are apportioned for the co-products in percentage in case of multiple
Co product.
If no apportionment structure has been defined for a leading co-product or process material, an error
message is issued.
Please refer below link for more detail of Co-Product costing and also consult with your FICO Team.
http://www.scribd.com/doc/109331756/Co-Product-settings-for-SAP-costing
I hope this document helpful to everyone...
Request to all expert suggest and guide if anything wrong in this document
Thanks & Regards
Umesh Mali

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