joint products and byproducts

access_time 2018-12-26T06:41:38.166Z face CA N Raja COST ACCOUNTING


                      let us take products like gasoline, fuel oil, lubricants, paraffin, Coal Tar, kerosene  all these products are produced from crude Petroleum  what is significant here is all these products have equal importance  they are simultaneously produced from the same process   each of these products have significant sale value  you cannot designate one single product as major product   if this is nature of products produced then we call them as joint products.

Let’s look at the definition of Joint Products now “two or more products separated in the course of same processing operation usually requiring further processing, each product being in such proportion that no single product can be designated as major product are called as Joint Products.


Then what are by products   have a look at molasses   you get this when you manufacture sugar  Ammonia and Benzole   you get all this  when u carbonize the coal  glycerine you get this when you manufacture soap. when we say by product they are all the products which you get from either the material discarded in the main process or these are all products produced from scrap or waste materials in the process or these are all the products which emerge from the processing operation of another product 

i.e, you will get them when you produce some major products and these materials will get their value only at the time of separation from the main product.  So by products are basically secondary product or subsidiary product and they emerge because of manufacture of main product.

We have to segregate this by product from main product at a particular point right that point is called us SPLIT OFF POINT. so till that split of point - all the expenses of processing will be joint and post which it will be segregated.  let us also appreciate the difference between joint product and by products - all the joint products have equal importance whereas by products will have very small economic value .

if you look at the production side joint products are produced simultaneouslywhereas by products production are incidental