The actual product refers to the tangible object and relates to the physical quality and the design. These two processes are responsible for the exchange of oxygen and carbon dioxide between living organisms and the environment. Photosynthesis converts carbon dioxide and water into oxygen and glucose. Glucose is used as food by the plant and oxygen is a by-product. Sahil Sanwal is an environmentalist by passion, loves to write, and a nature lover at heart. Apart from personal development and helping others with his work, he likes to write poems, penning his own thoughts down.
For example, if your company makes tires it might also produce sawdust as a by-product. Sawdust is useless to the tire company, so it would have no value. But if your company runs a wood shop, the sawdust may be useful for flooring or other products. Likewise, leftover scrap metal from making cars might have some resale value as it could be sold for recycling.
- The typical accounting for any revenues generated from byproducts is to offset them against the cost of goods sold for the primary products that are generated from the manufacturing system.
- Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years.
- Finance Strategists is a leading financial education organization that connects people with financial professionals, priding itself on providing accurate and reliable financial information to millions of readers each year.
- In some cases, costs subsequent to the split-off from the main product may be offset against the revenue earned from the by-product.
- Core product is a concept that describes the utility that a consumer derives by using the product.
Our writing and editorial staff are a team of experts holding advanced financial designations and have written for most major financial media publications. Our work has been directly cited by organizations including Entrepreneur, Business Insider, Investopedia, Forbes, CNBC, and many others. Our team of reviewers are established professionals with decades of experience in areas of personal finance and hold many advanced degrees and certifications. At Finance Strategists, we partner with financial experts to ensure the accuracy of our financial content. Marketing and administrative expenses may also be allocated to the by-product on some equitable basis.
