ACCA MA · Chapter 8 · Question 12 of 12
How are the sales proceeds of a by-product commonly treated in process costing?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Deducted from the cost of the process, in the same way as the scrap value of normal loss
Explanation
A common treatment is to deduct the net sales value of the by-product from the process costs (often by crediting the process account, as with normal loss scrap). This lowers the cost of the main products. By-products are usually not given a share of joint costs because their value is small.
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