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    oefranco59's Avatar
    oefranco59 Posts: 1, Reputation: 1
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    #1

    Jul 26, 2009, 11:34 AM
    What costs are associated with inventory
    What costs are associated with inventory
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Jul 26, 2009, 11:57 PM

    Do you mean what costs are counted as part of the cost of inventory? The price of it, plus any costs associated with getting it (transportation, sales tax, insurance, etc.), less any discounts you received.
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
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    #3

    Jul 28, 2009, 03:28 AM

    According to IAS 2 - Inventories 'All costs of purchase, cost of conversion and other costs incurred to bring the inventory to its present condition and location.

    Purchase costs comprise, purchase price, import duties and non recoverable taxes, transport, handling, and other costs directly attributable to the acquisition of inventories.

    Conversion costs include costs that are directly related to the units of production, such as direct labor, systematically allocated fixed and variable production overheads in converting the materials into finished product.
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