By Product and Co product Scenario

Value of the by product is very less as compared to the main product. The price of by product
credited to the production order or the material stock account. It is like waste or scrap.
Co product is produced with the main product and both products are equally important. In the
co product cost are settled with an appointment structure.
In Bom, we can maintain both by product and c product with the negative sign.
In co product, we need to put an extra indicator which shows co prod in Bom and also need to
maintain the appointment structure.

Here, in the above screenshot variance is settled at the FG level in the case of by product but in
case of co product, variance is settled on the basis of appointment structure to finished product
and co product.
By Product Scenario

I have added a component material as by product in the BOM of the finished material.

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Running the cost estimate (T Code CK11N) for the finished goods.
Here, we can see that system is calculating the cost of the component material and activity cost
for determining the cost of the finished material. Since by product is unwanted product so that
by product cost is subtracted from the component + activity cost to determine the finished
product cost.
Component + Activity cost=90.48
By Product cost= 10
Finished product cost=90.48-10=80.48

After saving the above cost estimate for the finished product., I am releasing the cost estimate
using CK24. The new price 80.48$ is applicable from the march month of 2023.

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Creating a production order

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Required components quantity

Releasing the order and goods issue using MIGO

531 movement type is used for the GR of the by product

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Confirmation of order using CO15

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GR of order using MIGO

Stock overview MMBE

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TECO of the process order

Settlement of the order using KO88

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Cost analysis in the production order

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Selecting the layout as cost trend

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Here, variance is calculated as -373.76 $.
Click on the green highlighted field

Click on the line item

Variance is settled against the finished product as expected in case of by product.

Co Product Scenario

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Selecting the co product checkbox in the MRP 2 view of the finished material and also creating
the appointment structure

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Selecting the co product checkbox in the MRP 2 view of the co product material

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Creating the finished material BOM and putting the checkbox for co product

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Cost estimate and release of the finished material and co product using CK11N and CK24

Here, finished material cost= (component cost + activity cost)* 60%=90.48*.60=54.29

Co prduct material cost= (component cost + activity cost)* 40%=90.48*.40=36.19

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Creation and release of the production order

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GI and confirmation of the production order

Here, co product is not coming during GI posting like by product.

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Goods Receipt and TECO of the production order

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Checking stock in MMBE

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Settlement of variance using KO88

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Checking cost analysis in the production order
Variance is settled as per the appointment structure to finished material and co product
material

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Some configuration related to appointment structure
Define source structure (T Code OKEU)

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Settlement profile configuration and assignment of source structure (T code OKO7)

Assignment of settlement profile to the order type (T code OPJH)

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