BYPRODUCT English meaning

Any revenue resulting from the sale of the by-product is credited either to income or to the cost of the main product. When there are multiple products created from a production process, the byproducts can be discerned by seeing which ones have a minor resale value in comparison to the value of the other products. If there is no clear differentiation between primary products and byproducts, treat them all as primary products.

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• When this happens, it is recorded as a separate line item on the income statement.
• A byproduct is an incidental product that is created by a manufacturing process that creates multiple products.
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• This account’s balance can be shown on the income statement as indicated in Method 1, except that the manufacturing cost applicable to by-product inventory should be reported in the balance sheet.
• Any expenses involved in further processing or marketing the by-product are recorded in separate accounts.

What we found is that many of the trends from our 2023 report have persisted, especially with consumers continuing to express concern about their personal financial situations amid rising inflation. 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 addition, the production (manufacturing) cost of the main product is credited. The replacement cost method is usually applied by firms whose by-products are used within the plant. This avoids the need to purchase certain materials from outside suppliers.

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Holding an MBA in Marketing, Hitesh manages several offline ventures, where he applies all the concepts of Marketing that he writes about. Additionally, as generative AI makes headwinds across industries, its impact on consumers’ purchasing behaviors is being felt too. We look at the ways in which this technology is being used and adopted by consumers within different demographic cohorts.

Dairy farmers breed and raise cows to produce milk in order to sell it to grocery stores, restaurants, and distributors. He or she is interested in producing milk, but the manure is created during the process. The revenue generated from the sale of this product can be used to meet some expenses of the business or bring down the costing of the main product.

Examples of Byproducts

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The reversal cost method is similar to the last technique illustrated in Method 1. The balance of this account is shown in the income statement using one of the procedures outlined in Method 1. Entries in the journal for Method 2 involve charges to by-product revenue for the additional work required, and potentially also for factory overhead. Method 1 is a typical non-cost procedure in which the final inventory cost of the main product is overstated to the extent that some of the cost belongs to the by-product. As such, the by-product can serve as an additional source of income.

What is a Byproduct?

A by-product is a product with a relatively small total value that is produced simultaneously with a product of greater total value. Product is a classical Latin word from productum, meaning “something produced.” The English use, to mean “anything produced,” is from the late 16th century. Byproduct, or by-product, is a compound word and is never written as two separate words.

The plant generates electricity using a nuclear process that produces nuclear waste. Not only is this material not salable, it is hazardous to store and dispose of. Companies must build highly specialized facilities to store this material and hire employees who can take caution in handling, transporting, and disposing of it. E.g. A printer manufacturer sells color ink refills for the printer. To maintain the performance of the printer, it is advisable that the customer uses the printing ink from the same manufacturer. Hence, here the customer doesn’t have much choice but to buy the ink from the manufacturer only.

And it should never be spelled as bi-product since by- is the accepted English prefix spelling. These examples are programmatically compiled from various online sources to illustrate current usage of the word ‘by-product.’ Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Hitesh Bhasin is the CEO of Marketing91 and has over a decade of experience in the marketing field. He is an accomplished author of thousands of insightful articles, including in-depth analyses of brands and companies.