Joint costs are not allocated to a by-product.

Question

Quizplus · Accepted Answer

Joint costs are incurred when producing two or more products from a common input, and they cannot be easily separated. By-products are products that are incidental or minor in comparison to the main product, and they are produced as a result of the same production process. The costs associated with by-products are usually minimal and they are not considered in the allocation of joint costs. Therefore, joint costs are not allocated to a by-product.

Joint Costs Are Not Allocated to a By-Product