Joint Products and By Products

Joint products and by products are the terms which are used in the context of manufacturing industry, these both terms connotes different meaning and therefore it is important to understand meaning of both of them so that one does not confuse both the terms.

Joints goods are those which are produced from the same process during manufacturing , example of joint product is gasoline and fuel which are produced during crude production while by product is a created along with some other manufactured goods. Common example of it is molasses which is produced during the production of sugar. The value of by product is much smaller as compared to primary produce which is not the case with joint goods.

While making cost accounts for a manufacturing concern the accountant should know the bifurcation of joint and by products and that is the reason why having technical knowledge regarding it assumes importance because the accounting treatment for both of them are different and if one does not know he basic difference than chances of making errors in the books of accounts increases substantially.

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