CAT / FIA FMA Syllabus C. Cost Accounting Techniques - By-products and joint products - Notes ^{12 / 17}

Joint Products

Joint products are two or more products which are:

• output from the same processing operation

• indistinguishable from each other up to their point of separation

• Joint products have a substantial sales value

• Often they require further processing before they are ready for sale

• Joint products arise, for example, in the oil refining industry where diesel fuel, petrol, paraffin and lubricants are all produced from the same process

By-Products

A by-product is a supplementary or secondary product (arising as the result of a process) whose value is small relative to that of the principal product. 

The distinguishing feature of a by-product is its relatively low sales value in comparison to the main product. 

In the timber industry, for example, by-products include sawdust, small offcuts and bark.