Joint Product | Meaning | Characteristics | Objectives

What are Joint Products?

In a manufacturing process, a raw material may be converted into finished product. During the process of conversion, there is an emergence of waste, scrap, joint products and by products. This is the significance of processing industries. If the output of a process has very less value or no value, they may be regarded as scrap or waste. Sometimes, the output of a process may get its value after further processing. They are regarded as joint product or by product.

Joint Product - Meaning, Characteristics, Objectives

Joint Product – Meaning, Characteristics, Objectives

There is no exact classification of the output as joint product or by product. The joint product of one concern may be a by-product of another concern.

Joint Product

Generally, a same raw material is used to manufacture two or more products from the single process. Therefore, an increase in the output of one product will bring an increase in the output of other products from the same process or vice versa but not in direct proportion.

Two or more products are produced from the joint production process in one phase of production. This phase or point is referred to as the split off point.

In some industries where two or more products of equal importance are simultaneously produced, such products are regarded as joint products.

Meaning of Joint Product

Joint product means the production of two or more products from the same basic raw material and separated in the course of same processing operation usually requiring further processing, no single product can be designated as a major product.

Definition of Joint Product

According to the ICMA Terminology,

Joint products are two or more products separated in the course of processing, each having a sufficiently high saleable value to merit recognition as a main product.

Jain and Narang,

Joint products that are produced from the same basic raw materials, are comparatively of equal importance, are produced, simultaneously by a common process and may require further processing after the point of separation.


Joint products are distinctly different major products that are inevitably produced simultaneously from common inputs or by common processing.

Joint products may be defined as the production of two or more products from the same basic raw material in a process and require further processing to increase the value of such products after a point of separation.

Examples of Joint Products

For example, in oil Industry, gasoline, duel oil, lubricants, coal tar and kerosene are all produced from crude petroleum. These are known as joint products.

The joints products are not produced or emerged incidentally. The production of joint products is the deliberate intention on the part of management.

Characteristics of Joint Products

Generally, the joint products have the following characteristics.

1. The main objective of manufacturing operation is to produce joint products.

2. The sale value of all the joint products is relatively high and none of the joint products are significantly greater in value than other joint products.

3. There is no compulsory for further processing after the point of separation. These types of joint products are sold directly after split off point.

4. Sometimes, the joint products may require further processing.

5. Joint products require simultaneous common processing.

6. The quality of joint products may not be maintained at the maximum.

7. The management has little or no control over the maintenance of quality of joint products.

Objectives of Joint Cost Analysis

The following are the objectives of joint cost analysis.

1. Correct collection, compilation and classification of process costs.

2. The profit or loss of joint products manufacture is determined.

3. The method or pattern of production may be determined.

4. Fixing most profitable product mix may increase the profit.

5. The relationship between the cost and profit can be studied to fix the price of joint products.

6. The effect of increase or decrease in cost is to be find out due to increase or decrease in the output of joint products.

7. The profitability in selling of joint products and by-products can be determined.

8. The volume of profit may also be maximized with the help of marginal contribution analysis.

Share the Knowledge: