Hi Sudeep
Big Choi is 100% correct..
You create 2 Proc Alternative for your material from CK91N - i.e. one for In House Mfg and One for Sub contracting... You have something called "Process Category" in CK91N to choose, in order to differentiate between IN HOUSE and SUB CON
Proc Alt 1: Choose Process Category = Production and CHoose Val Type 1
Proc Alt 2: Choose Process Category = Subcontracting and Choose Val Type 2
After that maintain mixing ratio in CK94 and calculate your Standard cost..
But, there is a CAVEAT here.. Can you physically identify any 2 given units of Product to its source?? i.e. can your shop floor personnel differentiate between Own manufactured and Sub contracted product? If no, there is no point in activating Mixed Costing
Br, Ajay M