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Procurement alternatives and procurement processes are used in the components Product Cost Planning, Cost Object Controlling and Actual Costing/Material Ledger in Product Cost Controlling. The relationship between the two objects becomes apparent when multiple materials result from a single procurement process. For this reason, the relationship is explained using the example of joint production.


Joint Production

Two materials are produced from one manufacturing order.


You are using the application component Actual Costing/Material Ledger.

Linking the procurement alternative and procurement process with other system data

The system creates the following:

The manufacturing order with which the co-products are produced is linked to the production process.

The procurement alternative links the procurement process to the corresponding co-product. The co-products are listed in the order items in the manufacturing order.

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* Leading co-product or process material

Updating the costs

In order to calculate the periodic unit price for each co-product, the actual costs must be updated to the order item, that is the procurement alternative. During production, the actual costs for the manufacturing order are first collected on the order header as they relate to the procurement alternative. In period-end closing of Cost Object Controlling, the costs are distributed to the order items and, in turn, the procurement alternatives. You can analyze the costs on the order item (for example, during variance calculation). The updated data can be settled to other application components such as Financial Accounting (FI), Profitability Analysis (CO-PA), Profit Center Accounting (EC-PCA) and Actual Costing/Material Ledger. In the application component Actual Costing/Material Ledger you can then calculate the periodic unit price for co-products.


Multiple procurement alternatives are also assigned to a procurement process in, for example, in the following situations:

See also:

Production Processes

Structure link Special Requirements in Joint Production


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