Skip to Content
0

How to calculate bi-product cost based on the quality of bi-product output

Nov 18, 2016 at 02:42 AM

50

avatar image

Hi Experts,

In a chemical industry, a particular process produces bi-product. In every product batch, bi-product can have different chemical composition and hence its cost can vary (say bi-product having purity of 10% can earn 100 / Ltr and the bi-product having purity of 12% can earn 150 / Ltr). In such a situation if I take out bi-product at standard cost, then it may not be correct (as the same product is getting used to manufacture some other product and hence the costing then may not be correct). In such a case, how can I receive the bi-product at different cost depending on the quality characteristics?

10 |10000 characters needed characters left characters exceeded
* Please Login or Register to Answer, Follow or Comment.

1 Answer

Best Answer
Murali Krishna Maganti Jan 29, 2017 at 03:20 PM
0

Hi,

I would recommend you to use Batch costing for every Bi-Product batch produced.

regards,

Murali

Share
10 |10000 characters needed characters left characters exceeded