Co product costing

[Former Member]

Dear all,

The scenario is as below:

Finished material: X

Alternative BOM 1 has co-product: A, raw materil: R1

I have assigned the apportionment structures in the material master and have given equivalence numbers. I have taken a cost run and costing is also taking place properly.

Now i have :

Finished material is same: X

Alternative BOM 2 has co-product: B, raw material: R2

I want to carry out production using alternative BOM 2. But my cost estimate is based on BOM 1.

What do i do in this case? Do i give another apportionment structure in materal master of X ? If i give another one, then would the system automatically pick up the apporionment structure depending on the co-product produced?

Kindly advise.

Thank you,

Shrenik

[Former Member]

For one material there will be only one Standard cost.

Either you have to consider for BOM1 or BOM2.

[Former Member]

Ya, that is fine. Suppose i consider cost estimate of BOM 1. Now, i carry out production using BOM 2. So what happens in this? There would be variances also. So how do i take care of that?

Shrenik

[Former Member]

If you have executed your Std Cost estimate using BOM1 then System will always

consider that price.

There is a option of Mixed costing in which you can give certain weitage for each Prod Versions and based on that System will give you one std cost taking account of both the versions.

[former_member196398]

Shernik,

I would create seperate BOMs for Product A and Product B with Finished Product X as co-product along with their respective raw materials.

Assign the apportionment structure and equivalence numbers to product B and product A and finished product X gets costed according to product A and B. This way order costs are taken care, but still I think Product cost can only be one.

Regards,

Prasobh

[Former Member]

Hi Prasobh,

Here again there is a complexity. For material A also the scenario is similar. It can also have multiple alternative BOMs each having varied co-products.

Shrenik