According to IAS 2 Inventories, which of the following costs should be included in valuing the inventories of a manufacturing company?

AS PER IAS2 INVERNTORY SHOULD INCLUDE DIRECT COSTS AND OPTION1 IS CORRECT.

EXPLAINATION IS GIVEN BELOW FOR YOUR UNDERSTANDING

IN INVENTORY Cost should include all....

• costs of purchase (including taxes, transport, and handling) net of trade discounts received
• costs of conversion (including fixed and variable manufacturing overheads) and
• other costs incurred in bringing the inventories to their present location and conditio

Inventory cost should not include...

• abnormal waste
• storage costs
• administrative overheads unrelated to production
• selling costs
• foreign exchange differences arising directly on the recent acquisition of inventories invoiced in a foreign currency
• interest cost when inventories are purchased with deferred settlement terms.

Cost should include all: [IAS2.10]

costs of purchase (including taxes, transport, and handling) net of trade discounts received

costs of conversion (including fixed and variable manufacturing overheads) and

other costs incurred in bringing the inventories to their present location and condition

Carraige Inwards cost will increase the value of material/purchases and it appears in Debit side of Trading Account under the purchases.

1. So, the carraige inwards will be a part of inventory evaluation.

Carraige Inwards cost will increase the value of material/purchases and it appears in Debit side of Trading Account under the purchases. 1.So, the carraige inwards will be a part of inve

IN INVENTORY Cost should include all....

• costs of purchase (including taxes, transport, and handling) net of trade discounts received
• costs of conversion (including fixed and variable manufacturing overheads) and
• other costs incurred in bringing the inventories to their present location and conditiontory evaluation.

(1) Carriage inwards, this part of the cost for the inventory

carriage inwards

carriage outwards

depreciation of factory plants