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Former Member

co products---equivalence number

Hi all,

In case of co products we need to define the apportionate structure with equivalence number for costing purpose, this will be done in "Joint Production" details in the same view. Say for ex---30:30:20:20

What does these figures indicate???

What is the role of these figs in costing???

what is to be done in case of the BOM??

Regards,

MHP

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2 Answers

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    Former Member
    Jan 22, 2008 at 02:47 PM

    MHP,

    It simple, the equivalence number forms the basis for Cost Split among the Co-Products. Example the order cost is settled in the ratio of 30:30:20:20 to the co-products.

    No other defination is required in the BOM with respect to equivalence number... In BOM Co-Product indicator should be activated and the quanities should be mentioned in -ve for the co-products.

    Regards,

    Prasobh

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    • Former Member Former Member

      Manish,

      1. When an order is created for Co-product header material, that particular order costs gets settled among the co-products based on the equivalence number defined in the Joint Production section of the material master of the Header/order material.

      2. BOM does not reveal anything on how the costs needs to be settled. If you have maintained 30:30:20:20 (A:B:C:D) in the Joint production tab of the material master for "A" and if order is created for "A", the order costs are settled A=30%:B=30%:C=20%:D=20%.

      3. Not sure of which structure you are asking for...Pls explain.

      Regards,

      Prasobh

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    Former Member
    Jan 22, 2008 at 10:42 AM

    this will indicate that how much cost shearing has to be done between main product and co product

    Equivalence Numbers

    The activity types created on the cost center can be weighted by

    assigning equivalence numbers to them. The costs not dependent on the

    activity types are then allocated to the activity types in the cost

    center based on this weighting.

    The SAP System executes this allocation internally using two procedures

    which require the calculated data to determine the activity-independent

    values. Equivalence numbers are used in the transactions for

    o activity price calculation

    o variance calculation and allocation

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