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Question

When two or more products come out of a single raw material which is equally important, are referred to as __________.

A
By-products
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B
Incidental products
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C
Joint products
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D
None of the above
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Solution

The correct option is D Joint products
Joint products are multiple product generated by a single production process. They can not be differentiated until a split off point. The materials used in the production of such materials are the same and no allocation is required to be made of the materials between such joint products.Thereafter, a separate cost is incurred to process it further. Prior to the split off, the cost incurred can be considered as joint cost for the joint products.

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