Difference between co-product and By-product

Question

Hi,
Can anyone tell me Difference between co-product and By-product with example?
What is their impact on costing?

Answer 1

Hi,
By-Product : By-Product is a Product Created While Making Production
1. The System Does not create a separate order item for each by-Product
2. The Material Valuation of a by-Product is always based on the price, specified by the price control in the material master
3. The by-product must be listed as an item in the bill of material of the main product .The bill of material item must have a negative quantity (for example ‘1 -’)
4. Byproduct has only the -ve quantity in BOM component, it does not go for joint production costing.
5. Movement type 531 to post the By-Product during Confirmation.
6. Settlement of cost is done to the header of the material
Co-Product :A co-product is a product that is produced in conjunction with other products. The system creates a separate order item in the production order for each co-product. As a result, it is possible to display actual costs at co-product
Settings: 1.) You have to activate check box in MRP2 view for co product.
2.) For co products we also need to define the apportionate structure with equivalence number for costing purpose, this will be done in "Joint Production" details in the same view. (30:30:20:20)
Prerequisite for the main product:
1.) The indicator Co-product must be activated in the material master of the main product (MRP area)
Prerequisites for a co-product:
1.) The indicator Co-product must be activated in the material master of the co-product (MRP area)
The co-product must be listed as an item in the bill of material of the main product
2.) On the Basic data tab page of the BOM item, the indicator Co-product must be activated in the field group General data
Regards
Sunil Kumar