Learn how to split joint manufacturing costs across multiple simultaneous outputs using Net Realizable Value (NRV) and physical volume allocation methods.
Abhishek Kumar
Senior Finance & ERP Systems Architect, Werkora
When a single chemical refining or dairy processing run yields multiple outputs simultaneously (e.g., crude oil yielding diesel, petrol, and asphalt), costs incurred before the split-off point must be equitably divided. Werkora uses Net Realizable Value (NRV) or physical measure methods to allocate joint costs accurately.
In dairy processing, raw milk enters separator centrifuges and splits into cream and skim milk. Before the split-off point, raw milk procurement and pasteurization costs are shared. Determining the cost per liter of cream versus skim milk requires clear mathematical allocation rules.
Co-products carry significant commercial value and justify the manufacturing run. By-products are low-value secondary materials generated unavoidably. Failing to distinguish between them skews inventory valuation on corporate financial statements.
Werkora provides configurable joint cost allocation engines: physical volume (kilograms or liters produced) or Relative Sales Value at Split-Off / Net Realizable Value (NRV), ensuring gross margins reflect true economic contributions.
Werkora equips every shop-floor supervisor, line operator, storekeeper, and accountant with their own dedicated login with plans sized for your operation.
Co-products are primary outputs of substantial commercial value; by-products are incidental minor outputs with low economic value (e.g., sawdust in timber milling).
Werkora deducts by-product net sales value directly from joint process costs, lowering the net production cost of the primary co-products.
Senior Finance & ERP Systems Architect, Werkora
Senior accountant and enterprise systems specialist with 9+ years of experience across Indian GST/TDS compliance, SAP S/4HANA, Tally Prime, and finance automation. Direct operational background in precision instruments manufacturing and multi-jurisdictional statutory compliance with a zero-penalty record.
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Benchmark your current software bills against Werkora's unit-based pricing (10 users/unit · min 3 units).
Projected 3-Year Savings for Your Operation (3 Factory Units · 30 Users)
Save up to ₹6.8 Lakhs over 3 years
Compared to standard per-user seat pricing models like ERPNext ($13.50/user/mo).
Each unit includes 10 active user seats (Operations, Store, Accounts, Planning).
Base commitment minimum is 3 units (30 user seats total).
Commitment Term:
₹14,997/mo (3 Units · 30 Seats)
Annual Cost
₹1,79,964
3-Year TCO
₹5,39,892
$13.50 / user / mo
Annual Cost (30 Users)
₹4,05,816
3-Year TCO
₹12,17,448
₹499 / user / mo (~$6)
Annual Cost (30 Users)
₹1,79,640
3-Year TCO
₹5,38,920
$8 / user / mo
Annual Cost (30 Users)
₹2,40,480
3-Year TCO
₹7,21,440
$50+ / user / mo
Annual Cost (30 Users)
₹15,03,000
3-Year TCO
₹45,09,000
Review the ERP buying guide or contact us to discuss the units, users, and deployment options your factory needs.
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