A main product is a
joint output that generates a significant portion of the
net realizable value
Net realizable value (NRV) is a measure of a fixed or current asset's worth when held in inventory, in the field of accounting. NRV is part of the Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS ...
(NRV) within a
joint production process. The classification of a product resulting from a joint production process as either a main product or a
by-product
A by-product or byproduct is a secondary product derived from a production process, manufacturing process or chemical reaction; it is not the primary product or service being produced.
A by-product can be useful and marketable or it can be cons ...
has relevance in the context of
cost management because costs are only allocated to main products, not to by-products.
[Wouters, Mark; Selto, Frank H.; Hilton, Ronald W.; Maher, Michael W. (2012): ''Cost Management: Strategies for Business Decisions'', International Edition, McGraw-Hill, p. 538.]
References
Product
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