ECONOMICS

Detailed explanation-1: -Examples of byproducts are manure from a feedlot operation, sawdust at a sawmill, salt from a desalination plant, and straw from a grain harvesting operation.

Detailed explanation-2: -When the production of two or more products of similar value, are made together with same input and process, is called joint product. The term by-product means a product which is incidentally produced, during the processing operation of another product.

Detailed explanation-3: -(a) Joint products are of equal importance whereas by-products are of small economic value. (b) Joint products are produced simultaneously but the by-products are produced incidentally in addition to the main products.

Detailed explanation-4: -There are two ways of accounting for a by-product: the production method and the sales method. Under the production method, a product’s sales value is recognised in the accounting period in which the product is produced, and the by-product is considered as inventory.