The methods of allocating costs of by-products are exactly the same as the methods of allocating costs among joint products.

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By-products are often considered incidental to the main product and their costs are allocated differently, typically using simpler methods such as net realizable value, whereas joint products share the costs incurred up to the split-off point based on more complex allocation methods like physical units or relative sales value.

The Methods of Allocating Costs of By-Products Are Exactly the Same