CO-PRODUCT AND BY PRODUCT IN SAP CO
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
CO PRODUCT
BY PRODUCT
Produced in conjunction with other products.
Produced in conjunction with other products.
Comes along with final product after
completing the production.
Comes in middle of the production (at the time
of goods issue to production).
The indicator Co- Product must be activated
in the material master of the Main product
and CO Product (MRP 2 View) and in BOM as
well.
No By Product indicator in the material master.
Must be listed as an item in the bill of
material of the Main Product.
Must be listed as an item in the bill of material
of the Main Product.
Must have negative quantity ( For example ‘1- Must have negative quantity ( For example ‘1-‘)
‘) in the BOM and CO Product tick. In BOM of in the BOM.
main product , Select CO Product then click
on ITEM tab there is checkbox for CO Product
tick it.
Item category for itemization is “ A “ for CO
Product you can see this in costing.
Item category for itemization is “ M “ for BY
Product you can see this in costing.
Create Separate item for OIT in settlement
rule of the production order.
Does not create Separate item in settlement
rule of the production order.
Main Product and CO Product are settled to
different receivers.
No Settlement.
It is possible to display actual costs at CO
Product level.
Material valuation is always based on the price
specified by price control in the material master.
Movement type is 101
Movement type is 531
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Define an “ Apportionment Structure “ in the material master of the Main Product.
The apportionment structure specifies how the total costs should be distributed over
the main product and co product.
For example,
Apportionment Structure as per material master
Main Product 90%
CO Product 10%
Suppose total costs is 1000 /Then, Main Product costs will be 900 /- and CO Product costs will be 100 /So as per material master apportionment structure total 100% distributed between Main
Product and CO Product.
Below is the material masters of the materials :
1. Main Product
Click on joint production for distributed rule
Click on Equivalence Number
Here put your Main Product and CO Product and there receiving costs percentage here I
have given 10% to CO Product and 90% for the Main Product.
2. CO Product
Required CO Product tick in
Not required to fill joint production data for CO Product.
3. BY Product
For BY Product put price manually
You can take Semi finished and Raw material as well
BOM of the Main Product
Take minus quantity for CO Product and BY Product.
Select CO Product and click on Item
Tick this check box.
Not Required this tick for BY Product
Routing CA01
So mention this BOM and Routing in Production version of the Main Product
Not required Separate BOM and Routing for CO Product and BY Product
Now take costing run CK11N or CK40N
Here you may need to make some changes in cost component structure for addition of cost
element required for CO Product.
So as per our Apportionment structure of Main Product’s material master cost divides
between Main Product and CO Product as 90% , 10% respectively.
And BY Product Cost came from material master you have to put price manually there.
Check item category for itemization of CO Product is “A” and for BY Product it is “M”.
Now we will do Production
Requirement -MD61
Stock Requirement List – MD04
MRP Run – MD02
Save
Now Start Process go to MD04 again
Procure Raw Material
Movement 101 take place at the time of Goods Receipt
Now Do Production of Semi Finished Material
Confirmation of Semi Finished Material
Then do Production of Finished material
Confirmation of FG material means main material
Here I have increasing activity hrs for variance
You can see automatic CO Product and BY Product coming at the time of confirmation
( If in your case not showing Main Product or CO Product make you have below tick in your
config OPK4N )
Production Done
Cost trend analysis
Actual Overhead Calculation – KGI2
Calculate overhead for your Production order
After Overhead calculation again in Cost Trend
Preliminary Settlement for Co- Product – CO8B Single-Level, CO8A Multi-level
OIT = ORDER ITEM
So by doing this step all the actual value of this production order will get settled to Main
Product and CO Product as per Equivalence Number ( Apportionment Structure Rule 90%
and 10%)
We can see Actual Cost by CO -Product level as well by doing this.
Click on Accounting Document
Here values getting distributed between Main Product and CO Product as per rule
Controlling Document
By clicking on receiver
Calculate WIP- KKAX/KKAO
Now Calculate Variance – KKS2/KKS1
Above variance appear separately for Main Product and CO Product
Click on cost element for detail view
For Co Product
Now for main product select line and again click on cost element
Now Settlement -KO88/CO88
Cost trend after settlement