Example: Preliminary Settlement and Settlement in Joint Production
The following tables illustrate the following:
How the costs on the order header are distributed to the order items
How the costs on the order items influence the inventory values of the co-products
The following postings have taken place for the order:
The production costs have been posted with a confirmation.
The material costs have been posted with a goods issue.
The overhead costs have been posted with overhead calculation.
Costs on the Order Header
Source Assignment |
Costs |
Equivalences |
Production costs |
USD 10.50 |
2 : 1 |
Material costs |
USD 10.50 |
1 : 2 |
Overhead |
USD 1.05 |
2 : 1 |
The
Preliminary Settlement for Co-Products, Rework
function apportions these costs to the order items in accordance with the apportionment structure specified in the material master record.
Costs on the Order Items
Source Assignment |
Carbide (Item 1) |
Cement (Item 2) |
Production costs |
USD 7 |
USD 3.50 |
Material costs |
USD 3.50 |
USD 7 |
Overhead |
USD 0.70 |
USD 0.35 |
Total |
USD 11.20 |
USD 10.85 |
Settlement passes on the distributed costs to
Financial Accounting
in accordance with the settlement rules for the order items.