This document provide you some basic overview about the Joint production (Co-product,By-Product) with process Material.
Co-product:
By-Product:
Cost of the primary product(s) produced – Total cost of Production process.
Co-Product Vs By-Product:
Process material:
Example Scenario:
Co-Products : COP01 and COP02
Fixed price Co-product : COP3
By-Product : BYP01
Raw material used : RM003
Process Material : PROC
Here the some of the Important settings need to be done at master data level.
In costing view of PROC material, click on Button 'Joint production'
Maintain in what percentage you want to apportion total production cost into co-products.
It is also possible to give different % for Raw material ,Activity and OH cost which need new Source structure.
Here the percentage is 60 and 40 .
For Co_products:
Fixed price co-product
In BOM :
Material Costing for Co-Product and By-Product:
Here BOM and routing is created for Process material which is non-stock and non-value material .PROC just represents the production process.
When we execute costing run for any one of the co-product let say for COP01 material ,remaining co-products and by products prices will be updated except 'Fixed price co-product'.
System will determine the Quantity structure (BOM and task list) from PROC material.
From this,
Production process cost = Ram material cost + Activity cost + Over head Costs
= 12.50 + 18.75 + 16.70 + 2 + 0+ 0
= 49.95 EUR
Value for Apportion = Production process cost - Fixed price Co-product cost - By-product cost
= 49.95 - 15 - 0.01
= 34.94
Apportion for COP1 = 34.94 * (60/100)
= 20.96 EUR
Apportion for COP2 = 34.94 * (40/100)
= 13.98 EUR
On release of this costing run the above prices will be updated in respective Material master. If you have any valid Quantity structure for By-Product (Only for costing) It price also calculated.
Settlement distribution in Production order:
Production Order Component overview:
Here settlement will be based on apportionment structure .
I will explain about period end activity of Joint Production in my next document.
Please leave your feedback if anything notexplained clearly or wrongly.
Thanks and Regards,
Velmurugan S
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