Q87. What is the treatment of By-Product?
Ans. Treatment of By-Product is:
- When they are off small value: It may be transferred to Costing profit and loss account or it may be credited to main product account.
- When they are of considerable value: Treat it same as joint product and apportion the total cost into Joint and By-product as per any of the above method.
Q86. What are various methods for valuation of By-Product?
Ans. Methods for valuation of By-Product:
- Market value or realization value (sales realization- separate expenses).
- Standard cost which is predetermined (it is adopted where valuation is not possible).
- Comparative price of same or similar goods in market.
- Reuse price when it is used in the factory itself.
Q84. Differentiate between Joint Product and By-Product.
- Joint Product of equal importance where as By-Product are of small economic value.
- Joint Product is produced simultaneously but By-Products are produced incidentally in addition to main product.
Q83. What do you mean by Joint Product, Co- Product and By-Product?
Joint Product: Joint Product represents two or more products separated intercourse of same processing operation usually requiring further processing, each product being in such proportion that no single product can be designed as a major product. In other words, two or more products of equal importance, produced simultaneously from the same process are known as joint product. Read More …