Question

Which of the following costs are included in inventory cost under international accounting standards? a. Storage costs of goods by a retailer b. Selling expenses c. Variable overhead costs of a manufacturer. d. Salary of accounting clerk that monitors inventory levels. e. All of the above are included in inventory cost. f. None of the above is included in inventory cost.

Answer 1

Answer : " c. Variable overhead costs of a manufacturer. "

=> Costs which are excluded from the cost of inventories:

(a)abnormal input amounts

(b)storage costs

(c)administrative overheads

(d)selling cost

Costs which are included in Cost of Inventories : Only production and manufacturing costs ie. Direct material, Direct labor and Variable overhead