CIMA P1 Syllabus A. Cost Accounting For Decision And Control - By-Products & Joint Products - Notes 7 / 10
By-products and joint products
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.