Joint Product and By Product - Dani Ki Costing - CA IPCC Video Lectures
Joint Product and By Product - Dani Ki Costing - CA IPCC Video Lectures | Joint Product and By Product - Dani Ki Costing - CA IPCC Video Lectures | Joint Product and By Product - Dani Ki Costing - CA IPCC Video Lectures | Joint Product and By Product - Dani Ki Costing - CA IPCC Video Lectures
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Dani
Ki Costing
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Joint
Product & By Product
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Lecture
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Lecture
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Lecture
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Lecture
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The
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Costing of Joint Products and By Products
Many a time it happens that at the time of manufacturing two or more
different products can be manufactured at a time. These products are considered
as Joint Products. The example of same can be production of fuel oil, paraffin,
etc from crude oil. While many a time a product is automatically manufactured
along with the main product without any extra activity, such product is known
as the By Product of the main product. Example of By Product is, glycerin is
obtained while manufacturing soap. Costing of such Joint Products and By
Products become complicated when the question comes for on what basis the cost
should be apportioned.
For apportioning the cost between joint products different methods
are used such as physical unit method, average unit cost method, survey method,
contribution margin method and market value method. While different methods
used in apportionment of joint cost of by products are market value or value on
realization, standard cost in technical estimates, comparative price and re –
use basis.
In costing of by product, the treatment of the same is based on the
basis of its value. It means when the cost of by product are very small then
total value of the same is to be considered, in case when the cost of by
product is of considerable value also total value is considered and the
difficulty arises when, further processing is required on by product. Value of
by product at split off time is considered in case when the by product is to be
further processed.
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