Detailed Answer
(a) The value of the by-products may be recognized at
two points in time: (1) at the time of production, or (2) at the
time of sale. Under the production method, the net realizable
value of the by-products produced is deducted from the cost of
the major products produced. Under the sale method, net revenue
from by-products sold (gross revenue from by-product sales
minus separable costs incurred) is deducted from the cost of the
major products sold.