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

[Expert]

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.

doubt:

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

https://help.sap.com/docs/SAP_S4HANA_CLOUD/4032610758dc437089f0c28320eec93f/d43579d6fb9b41a1bf78c9d5...

https://help.sap.com/docs/SAP_S4HANA_CLOUD/4032610758dc437089f0c28320eec93f/8530192552b3452bb799aaf0...


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

[Expert · Accepted solution]

What you described is a very complicated business scenario,

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

https://help.sap.com/docs/SAP_S4HANA_CLOUD/4032610758dc437089f0c28320eec93f/d43579d6fb9b41a1bf78c9d5...

https://help.sap.com/docs/SAP_S4HANA_CLOUD/4032610758dc437089f0c28320eec93f/8530192552b3452bb799aaf0...


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