Get to Know The Cost Accounting From One Product Relations With Other Products

Get to know the cost accounting from one product relations with other main products.

The development of the trade industry will always create new products to meet consumer needs.

Get to Know The Cost Accounting From One Product Relations With Other Products

This makes the company not only produce one product but some products.

But do you know? It turns out that one product with other products has relationships that can produce several kinds of products.

The relationship between these products is classified into several concepts, namely common products, shared products, coproduct, main products, and by-products.

Let's get to know the cost accounting from one product relations with other products

In detail it will be explained as follows:

Common Product

Common products are several kinds of products produced together by using the same facilities, but the origin of raw materials and direct labor can be traced to each type of product.

In terms of production costs absorbed by common products called Common Cost (Common Cost).

Common costs consist of raw material costs and direct labor costs that can be followed in their trace in each product.

While overhead costs cannot be followed in his footsteps on each type of product, therefore the cost of overhead the factory at the common cost is called the shared overhead cost (Joint Overhead Cost).

Examples of companies that produce common products are milk mills and butter (Dairy Product), they produce milk powder for babies, butter, and baby food.

Each product is processed with the same machine and the same facilities but at different times and alternately.

Raw materials and direct labor can also be identified in each product.

Together with products

Together products are some kind of products produced together or simultaneously by using one type or several kinds of raw materials, labor, and the same factory facilities.

However, the input (input) cannot be followed in his footsteps on each product.

In terms of production costs absorbed by shared products are called joint fees (Joint Cost).

The Joint Cost consists of raw material costs, direct labor costs, and factory overhead costs.

All of these costs cannot be followed in the tract on certain products.

For example, coal factories can produce coal, sulfate ammonia, benzol, coal tar, gas, coke gas oven, and so on.

Coproduct

Coproduct is some kind of product produced at the same time, but not from the same processing process or in other words the raw material is not the same.

Coproduct costs for raw material elements and direct workforce can generally be identified in certain types of products.

Even though the product is produced at the same time, but raw materials are not the same and not from the same processing process.

While for the cost of overhead the factory is enjoyed together by several kinds of products.

Coproduct example for example in sawmill and sawmill factories, they can produce boards and plywood from various types of logs such as teak wood, camphor wood, meranti wood.

The wood is processed so that it can produce a board in the form of teak wood boards, Meranti wooden boards, camphor wood boards, as well as teak plywood, camphor plywood, Meranti plywood.

In addition, sawdust and firewood can also be produced from the processing process.

Main products

In processing, joint products or coproducts can produce the main products and by-products.

The main products are products produced based on the main objectives or principal operating company.

Generally, the quantity and value are relatively greater.

For example furniture companies, the main products are in the form of furniture such as chairs, tables, cabinets.

Secondary product

A side product is a product that is not the main purpose of the company's operations but cannot be avoided in the process of processing products.

This is due to the properties of materials processed or due to the product processing nature.

The quantity and value of a side product are relatively small compared to the overall value of the product.

As a guideline, in the USA on a by-product arbitrary, if the value of a product is less than 10% of the overall value.

For example, their furniture companies have a side product such as firewood.

Above is a discussion about recognizing cost accounting from one product relations with other main products.

Hopefully, it can be useful.