Co-product:1.

Material master
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MRP/costing view (tick the co-product indicator) for all the co-products.
(forleading product also select co-product indicator in BOM)2.

If you want to use net realizable value and not apportionment structure - in
material master
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material view
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tick fixed price co-product.3.

Material cost estimate with quantity structure determines the quantity structure
using themaster data of the leading co-product.4.

In BOM of leading co-product

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Byproducts(costed using net realizable value) will be in negativequantity5.

Non leading co-products also have negative quantity

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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
versionCosting of co-product1.

For fixed price co-products

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use net realizable value method with fixed price / net realizablevalue method with
cost component split.2.

Use apportionment structure to calculate COGM for each primary product.

(apportionmentstructure can be in material master or in process order)3.

The total costs of the process are allocated to the co-products for each cost
component suingequivalence number.4.

Apportionment structure(AS, costing lot size, costing parameters are taken from
leadingmaterial)
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list all co-products to which costs should be apportioned and assign
equivalencenumbers. Source assignment of a source structure is maintained here.5.

Co-products are designated in the itemization with item category A and will have
negativequantities. (By products
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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, whichcontains quantity structure data.8.

For each co-product (including the leading product) the system generates an order
item and
turns on the �multi items� indicator
9.

Steps:a.

Create process order, scheduling, availability check, preliminary costing, release

of order, simultaneous costing, material withdrawl, confirmationsb.

GRc.

Overhead costs / process costsd.

Revaluatione.

Preliminary settlement of co-product

f.

WIP calculationg.

Order deliveredh.

Variance calculationi.

Settlement j.

Archive/delete10.

Maintain apportionment structure in process order, (equivalence numbers)11.

When process order is created

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check the followinga.

Whether on the basis of apportionment structure, settlement rule is created or

not(bothin the preliminary cost estimate and in the actuals)b.

Whether settlement rule for every item is created or not12.

Use a source structure, for getting different equivalence numbers depending on the
posted costelements (ex: material costs to co products in the ratio 3:2 and
overhead costs in 1:1)13.

Check in settlement profile: - tick mark for equivalence umber or % settlement14.

Unless apportionment structure is maintained in master data, source structure

cannot be used15.

WIP for co-products is to be valuated at actual cost; wip to order (excludes

credits from GR)16.

WIP is calculated for Co-products till header becomes DLV or TECO17.

WIP accrual to FI does

n�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 itemhas
settlement type FUL, variances can only be calculated when all order itemshave been
delivered19.

For manufacturing orders that have co-products for whose order item the settlement
type isPER, the order balance is always interpreted as a variance20.

No scrap variances can be calculated for co-products (so use variance key for which
scrapindicator is not set