Joint & By Product Costing in SAP

Joint product costing and By product costing is one of most important concepts of Chemical and Process industries in SAP if we have this scenario then this can be achieved in SAP.

What is joint product/co product costing

In Joint product scenario, we just can’t load the total cost of production of raw materials and production overheads on only one main product.

The joint products also should share the total cost of production in some proportion with the main product.

This will give the proper costing of main products and all the joint products; the cost sharing ratio can vary depending on the types of joint products.

What is By product costing

As per the globally accepted costing practices we need to give the credit of the by-product quantity with market value to the main product.

This will ensure the actual costing of the main product after the credit of the by-product and the by-product gets valued with the “net realizable value”