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In order to decide the accurate sales price of the product, it’s need to now rationally how to compute the cost of production. It’s no problem if the product processing independently. It’s not like in the palm oil industry, because of it has two products will out simultanously from the one cycle of processing. From the mill processing of oil palm will be got CPO and PK, while their cost combined in one total cost of production, and how it can be compute seperately. One of the two product is CPO as the main product, and another is PK as by-product. There are four methods of computation in cost of production for the two products. But the first two methods and the third are not suitable to be used as the method to compute the cost of production, so that’s way it can be used the fourth method to implement as the suitable cost of production computation of PK. The said fourth computation method called as “rendement-based cost of production” for by-product such as PK.

Oil Palm by Product: How to Compute Its Cost of Production