By-Product Homework Help
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What is By Product?
A by product is an item that is produced and considered as a secondary item in a joint production process and usually holds a lower value. For example, the fly ash produced during the steel manufacturing and thermal power plant operations is a byproduct and is of little use. Manure from various dairy farms is considered as the byproduct while dairy products are primary. It is rather an inadvertent product and in this By-Product homework Help article we discuss its details and usage.
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Non-Cost Methods of Accounting By-Products
The following non cost methods are opted in this By-Product homework Help article and described below as methods of accounting by products
1. Miscellaneous income method: by product with low sales as well as commercial values are understood in this method. The sales value is credited to profit and loss account as it is treated as other income.
2. Total sales less total cost: the sales value of main product is summarized with the sales value of byproduct to reduce the sales value with the cost of main product.
3. Total cost less sales value of byproducts: waste and scrap value of the product is subtracted from the combined cost of the total product in this. As per our By-Product homework Help article the cost product fluctuates with time in this process.
4. Reverse cost method: an element of profit is seen in the sales volume of the byproduct and is restricted to be charged from process account. The cost works backwards in this By-Product homework Help article advice method.
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