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Mar 01 at 02:25 PM

Cost accounting of co-products and by-products of process manufacturing


Hi SAP experts,

We encountered the following business scenarios:

The customer is the basic chemical industry. The raw material of finished product P is crude oil. During the production process of finished product P, the main product medium carbon P01, co-product high carbon CO-P02 and low carbon CO-P03, by-product BY-F01 and BY-F02 will be produced simultaneously. Due to the different carbon content of different batches of crude oil, the output weight ratio of main products, by-products and by-products is not fixed.

Company A and Company B are two independent legal entities. The business scenarios of intercompany transactions are as follows:

1) Company A purchases crude oil externally;

2) Company A entrusts Company B to process the finished product P, and Company A provides Company B with crude oil.

3) There is a commissioned processing contract between Company A and Company B, which stipulates the output ratio of crude oil and finished product P (with the total weight of high carbon, medium carbon and low carbon) and the commissioned processing fee. Company B delivers finished products P and by-products according to the entrusted processing contract. The processing fee is settled between companies by multiplying the received weight by different processing unit prices.


1) What is the accounting logic of the cost accounting of the co-products and by-products of ES? Please advise;

2) How to receive and settle the processing fee for Co-products and by-products in company A when there is only one subcontracting purchase order for the processing transaction between company A and company B? Only need to enter the main product in the inter-company subcontracting purchase order, or have to enter all the co-products and by-products at the same time?

What you described is a very complicated business scenario,

For doubt 1), you can check document below based on your current config

For doubt 2), I would rather recommend you to split your question and post them in both manufacturing and sales community.