settlement of process order

[Former Member]

In PP-PI We want to use active ingredient for scenario:

Our Raw material is MINING ORE which will have varying proportion of COPPER & COBALT.

Valuation of ORE is based on itu2019s content of COPPER & COBALT content. So we will use active ingredient to capture value of this raw material based on it content of CU & CO.

Now when we issue this material for production to process order, our semi finished output ( Say SFG1) will also have varying content of COPPER & COBALT based on kind of input quality. There will several process orders doing diff. processe.

Now my query is

1) Can we settle the process order variance to COPPER & COBALT content of SFG1 instead of normal settlement to SFG1?

2) Can I maintain my valuation of SFG1 based on COPPER & COBALT content?

3) Do we have any user exit or BADI available to replace SFG1 with CO& CU in process order settlement rule?

4) In standard cost estimate can we capture COPPER & COBALT characteristics?

Ultimately COPPER & COBALT are our finished goods.

I try to search sap help but not much info to help me on this.

Your input will be highly appreciated.

Nitesh

[ashok_backiaraj · Accepted solution]

Hi,

The concept explained is typically a co-product scenario:

Ore produces SEMI COPPER and SEMI COBALT. SEMI COPPER and SEMI COBALT produce FIN COPPER and FIN COBALT.

This scenario is covered under u2018CO-PROUDUCTu2019 concept. Here Ore is Raw Material, SEMI COPPER and SEMI COBALT are SEMI-PRODUCT and finally COPPER and COBALT are Finished Product.

Now estimate the standard cost for your SEMI-PRODUCTS and FINISHED PRODUCTS using integrated BOM. Sit with your PP Consultant who can give you good input for costing the products whether based on quanity yield or quality yield.

Once this is tested and found the results are expected, the solution can be freezed.

Please let me know your feed back.

Regards,

Ashok

[Former Member · Accepted solution]

Thanks for your reply

Can you throw some light on "costing the products whether based on quanity yield or quality yield"?

Nitesh

[Former Member]

Dear experts,

Any inputs on my posting?

I analysed further and now feel that selttlement to this CO& CU will not be possible.

But can any one guide if I my SFG1 has charectristic CO & CU can I get valuation of SFG1 on CO& CU content basis?

Pl. give ur openions.

Nitesh

I can enter CO & CU content in SFG1 only after quality testing and I want valuation of SFG1 based on this quality test only.

Edited by: NITESH PATEL on Sep 11, 2008 4:31 PM

[Former Member]

Dear Nitesh, If the process order has been created to manufacture SFG1, then the settlement receiver shall be SFG1 only. SFG1 contains both Copper and Cobalt. If 10 tonnes of Ore has been utilised to manufacture 1 tonne of SFG1, then the standard cost will be 10 tonnes of ore at MAP, labour and overhead at planned prices. The actual costs debited to the Process Order is compared with the standard costs and we get the variances. There is no need to value SFG1 on the basis of its contents of copper and cobalt. If the yield is more that it will be reflected in the production of ultimate Finished product. If the quality of the SFG1 is more on the basis of quality testing, you will get more profit at the market or else, you will more yield in the production of the main product. So there is no requirement to value the SFG1 on the basis of quality certificate. After the production of SFG1, then you can have Cobalt as your main product becos it is more costlier than Copper and copper either as joint product or as bye product. Trust this inputs helps much and as well appreciated! Cheers, Ashok SINGH