by-product pricing

by-product pricing

the PRICING of the various BY-PRODUCTS emerging from a common production process. The PRICE of each by-product should, if possible, cover its cost. However, the precise individual cost of each by-product is very difficult to determine given the common process costs involved. As a consequence by-products are often priced according to what the market will bear. See PROCESS COSTING.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson