Which of the following options correctly describes the cost treatment of a by-product that does not have any realizable value?

The cost of the by-product is treated as a joint cost. Joint cost is the cost incurred in a common production process that yields multiple products, including the main product and any by-products. In such a case, the cost of the by-product is allocated to the main product based on their relative sales values or some other suitable basis. This allocation process helps to determine the cost of the main product accurately, which is essential for pricing and profitability analysis. However, when the by-product does not have any net realisable value then main product has to bear the entire cost.