Dear Vamsi,
With co-products, the production costs are normally distributed among the produced materials.
Generally this is done using apportionment structures (you can check the joint production pushbutton in the material master) that defines the cost distribution between two or more co-products.
However, you can maintain this in the production order level by selecting Header -> Settlement Rule.
Maintain the cost share between the co-products here thus defining your settlement rule.
Kindly check further:
http://help.sap.com/saphelp_470/helpdata/en/38/0cf814ed9b11d29fa2080009b0db33/content.htm
Hope it helps.
Best Regards,
Rajen