What is distribution factor in SAP FIN-BAC-INV - Inventory Accounting?

SAP Term: distribution factor

• Component: FIN-BAC-INV

• Component Name: Inventory Accounting

• Description: Factor between zero and one that is determined based on the rule, transaction, and Customizing settings. The cost of goods manufactured for each joint product is obtained by multiplying the total cost of the production process by the distribution factor for that joint product.

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• Key Concepts: 
  Distribution factor is a term used in SAP Inventory Accounting. It is used to calculate the cost of goods sold (COGS) for a particular period. The distribution factor is calculated by dividing the total cost of goods sold for the period by the total inventory value at the end of the period. 
  
  How to use it: 
  In SAP Inventory Accounting, the distribution factor is used to calculate the cost of goods sold (COGS) for a particular period. To calculate the distribution factor, divide the total cost of goods sold for the period by the total inventory value at the end of the period. This will give you the distribution factor for that period. 
  
  Tips & Tricks: 
  When calculating the distribution factor, make sure to include all costs associated with inventory, such as freight and handling costs, in your calculation. This will ensure that you get an accurate distribution factor. 
  
  Related Information: 
  The distribution factor can be used to help determine inventory turnover and other important metrics related to inventory management. It can also be used to help identify areas where inventory costs can be reduced or improved.