Including Costs for By-Products 
Use
The manufacture of co-products can produce remaining materials (by-products) in a production process automatically. The costs for these by-products are calculated with the net realizable-value method. This method determines the cost of goods manufactured for the primary product by deducting the costs of the by-products from the total cost of the production process. The costs of the by-products thus represent a reduction in the costs of the primary product or process.
Prerequisites
The Co-product indicator is not selected for the BOM item under which the by-product is entered. Instead, a negative quantity is entered.
Features
In the material list or BOM for the primary product or process, you enter the by-product with a negative quantity. If the by-product is indicated as being relevant to costing , the total cost of the process is reduced by the costs of the by-products.
The cost of goods manufactured for a by-product can be calculated in two ways:
A price from the material master is used. The costs of goods manufactured for the by-products are arrived at by multiplying the output quantity by the price, and appear in the itemization of the cost estimate as negative values.
If you don’t want to include the costs of the by-products, deselect the relevant to costing indicator in the material list item.
The by-product can be manufactured using an alternative production structure, and a cost estimate for the by-product already exists. In this case, this cost components of the cost component split for the by-product are subtracted. The cost of goods manufactured for the by-products is arrived at by multiplying the output quantity by the costing results of the by-product from the alternative cost estimate.