Co-Product Configuration (for Cost Estimate)

Co-Product Configuration for following scenario:

 

Product A (Parent Material / Input Material), Product B, C and D are child materials (output materials). During manufacturing of Product B, we get 40% of Product D and the remaining 60% will be product B. Product is C is not the co-product, it always gets produced for 100%.

 

Solution:

 

Product B is the one you are trying to manufacture in the production process. And while doing so, the input material is A and Product D is produced. In this process Product C always gets produced.

 

B & D are co-products. C is the by-product according to the definition of these by SAP. And A is the input material. Please create the BOM for B in which A will be having a +ve qty and C & D will have -ve qty.

 

First, you have to create the BOM for B instead of A, since B is the one getting manufactured and not A. A will be either procured or manufactured in a different process. You will define BOM for A only for the process, which manufactures A.

 

We have to check Co-product indicator in Material Master (MRP2 View) for Product B and D.

 

Product B and D should have co-product checked in their "Basic Data" tab of BOM View (BOM view of Product A, I mean). For C you will have to tick the check box Fixed Price Co-Product in the Material Master Costing 1 view.

 

We have to have Apportionment structure in MRP2 View (Joint Production Button) for Product B only, and that apportionment structure (assuming we don't use Source Structure) with equivalence number will have 2 products - product B with equ. number = 60 and Product D with eq. no = 40).

1 comment:

  1. hi,

    could you explain the flow of product costing.

    i.e in simple terms.

    The standard cost in material master gets updated when cost estimate is run.

    The in Product costing we can do variance analysis, from where we get this actual price. can you explain in detail

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