Preliminary Settlement for Co-Products 
If co-products are produced in a manufacturing order, the actual costs for the production process are collected on the order header. At the end of the period, these costs can be distributed (presettled) to the order items according to equivalences. This enables you to debit the co-products with their share of the actual costs of the product. You use the function Preliminary Settlement for Co-Products, Rework for this.
Integration
In joint production, the following functions reference the order item:
WIP calculation
Variance calculation
Settlement to other application components (Financial Accounting, Profit Center Accounting, Profitability Analysis, and Actual Costing/Material Ledger)
For this reason, you always perform the Preliminary Settlement for Co-Products, Rework function before you perform the above functions.
Prerequisites
Check the equivalence numbers in the apportionment structure.
In the Preliminary Settlement for Co-Products, Rework function, you can distribute the overall costs for the order to the co-products. To do this you must define an apportionment structure. In this apportionment structure, you specify equivalences that are used to distribute the actual costs posted to the order header.
You can also define different equivalence numbers in accordance with the type of cost incurred (such as production costs or material costs). This means that you can assign the actual costs to different co-products depending on the source cost element. You use a source structure for this purpose.
Make the following settings in Customizing for Product Cost by Order under 
Period-End Closing 
Settlement 
:
Create a Settlement Profile
The settlement profile must:
Allow settlement to an order item
Allow proportional settlement (set the Equivalence number indicator in this case) or percentage settlement (set the % settlement indicator in this case)
Define Allocation Structure
In the allocation structure, enter all cost elements with which the order header can be debited. You only need to enter a cost element group.
Specify the settlement profile in Customizing for Product Cost by Order under Manufacturing Orders Check Order Types for Manufacturing Orders (PP and CO) .
Features
The costs for joint production can be collected on manufacturing orders (production orders and process orders) and distributed from the order headers to the order items. The costs are always distributed to the co-products under the original cost element.
Preliminary Settlement for Co-Products, Rework Is Based on Apportionment Structure and Source Structure
The Preliminary Settlement for Co-Products, Rework function is performed on the basis of a settlement rule. You can view this settlement rule in the manufacturing order itself. This is the settlement rule for the order header.
Note
You can view this settlement rule for settlement to material in the manufacturing order in the Co-product view of the material.
If you have specified an apportionment structure in the material master record of the primary product, this settlement rule is generated by the system automatically. You can view this settlement rule in the manufacturing order. The settlement rule specifies the order item as the settlement receiver. An equivalence number is assigned to each order item. The settlement type is derived from the default rule PP1 or PP2. The system determines the values to be distributed to the order items dynamically during presettlement.
Note
This settlement rule is based on a default rule in addition to the apportionment structure. The default rule for the Preliminary Settlement for Co-Products, Rework function is STR (with strategy for tracing factor determination). However, you do not specify this default rule as a default value for the order type / plant. You specify the default rule PP1 or PP2 as the default value for the order type / plant. This is the default rule that is used for settlement to stock.
If you have fixed-price co-products in an order item, no actual costs are distributed to these fixed-price co-products. The actual costs of the joint production process are distributed to all co-products that are not fixed-price co-products. This follows the concept of fixed-price co-products, according to which fixed-price co-products are always carried at the manually entered price and not debited with additional costs.
Transfer Prices
If you are using transfer prices, you can use the Preliminary Settlement for Co-Products, Rework function in multiple valuation views.
Constraints
You cannot use product cost collectors in joint production.
More Information
Additional information on the generalized worklist and on performance can be found in the section Preliminary Settlement for Co-Products, Rework.
For information on preliminary settlement using equivalence numbers, refer to the following sections:
Checking Apportionment Structures
Example: Preliminary Settlement and Settlement in Joint Production
For general information on joint production, refer to the following section:
Special Requirements in Joint Production
For information on updating data in multiple valuation views, refer to the following section: