Overview

CO-Product/ Joint Production, By-Product Costing Process, and Special Procurement Process:CO-Product/ Joint ProductionIn scenarios where multiple main products (not by-products) emerge from one production order, each product is treated with equal importance. These are termed CO-Products.A. CO Product Costing: Complete Live Scenario1. Define Source Structure:Design the way costs will be allocated among the CO-products.2. Material Master Creation:Two or more main materials (CO-products) are created.3. BOM Creation:Includes all raw materials required for the production, considering both CO-products.4. Routing:Steps involved in the manufacturing process.5. Equivalence Numbers Maintenance:In the material master, determine the proportion in which the joint costs will be distributed among CO-products.6. Standard Cost Estimation (CK11N & CK24):Calculate the standard cost for both CO-products.7. Production Order Creation:A production order is created capturing the manufacturing details of the CO-products.8. Production Observations:Observe variances, production efficiencies, and other aspects during the manufacturing process.9-10. Production Completion and Accounting:The completion of the order involves goods issue, activity confirmation, and goods receipt. The accounting entry captures the value of produced CO-products.11. Preliminary Settlement:Initial distribution of costs among CO-products based on equivalence numbers.12-13. Variance Calculation and Settlement:Any variance between planned and actual costs is calculated and settled among the CO-products.By-Product Costing ProcessBy-products are secondary products that arise during the production of a main product. They have some value but are secondary to the main product.1-3. G/L Account Creation and Configuration:A dedicated account for capturing the value of by-products. This is configured in OKTZ and OBYC settings.4-6. Material and Production Design:Create a main material and a by-product in the material master. Design the BOM and routing accordingly.7. Standard Cost Estimation (CK11N & CK24):Determine the standard cost for the main product.8-10. Production and Accounting:Execute the production cycle, record the emergence of the by-product, and capture the corresponding accounting entry.Special Procurement ProcessThis process is used for transferring products from one plant (like manufacturing) to another (like sales or depot).1. New Plant Creation:A new plant (typically a sales or depot plant) is created by copying configurations from an existing plant.2. Special Procurement Key Configuration:For the depot plant, define how the procurement will take place (typically from another plant).3. Standard Costing Estimation:Determine the standard cost of the material in both the manufacturing and depot plants.4. Transfer Posting:Materials are transferred from the manufacturing plant to the depot/sales plant. This reflects a change in stock and may or may not have financial implications based on the configuration.These processes in SAP ensure that production scenarios, whether they involve co-products, by-products, or special procurement scenarios, are captured in detail, enabling accurate costing and financial reporting.

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