What are By-products?
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Solution and Explanation
These secondary outputs are called By-products.
By-products usually have a lower value compared to the main product and may arise from the same raw materials used for the main output.
Examples include molasses from sugar production or sawdust from timber production.
By-products may be sold, used within the factory, or discarded depending on their value and usability.
Proper accounting for by-products helps in accurate cost allocation and may reduce the total cost of the main product if by-product sales generate revenue.
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