Coprodukt

Coprodukt, or coproduct, is a term used in economics and process industries to describe a product that is produced simultaneously with at least one other product in the same production process. Coproducts arise when inputs and processing are shared, and the outputs are intended as valuable products rather than waste. The exact mix of outputs can depend on technical and economic factors, and the products are often produced up to a common split-off point.

A coproduct is typically distinguished from a by-product. A by-product is a secondary output that usually has lower economic value and may be sold only after the main products have been produced. In practice, whether an output is labeled a coproduct or a by-product can depend on its value, role in the production plan, and managerial decisions about processing and sale.

Accounting and decision making around coproducts involve allocating joint costs incurred up to the split-off point. After that point, further processing costs may be allocated using methods such as net realizable value, physical units, or market prices. Management considers whether to market outputs as coproducts as produced or to pursue additional processing to increase overall profitability.

Examples of coproducts include sugar and molasses produced together in sugar refining, gasoline and diesel obtained from petroleum refining, and cream produced alongside milk in dairy processing. In life-cycle assessment and environmental accounting, the treatment of coproducts affects the allocation of environmental burdens among outputs.

See also: Coproduction, Joint product, By-product, Cost allocation methods.