Skip to Content

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

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?

Add comment
10|10000 characters needed characters exceeded

  • Get RSS Feed

1 Answer

  • Best Answer
    avatar image
    Former Member
    Jan 29, 2017 at 03:20 PM


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



    Add comment
    10|10000 characters needed characters exceeded