Inventory costs include: cost of raw materials, cost of conversion and
cost necessary to bring inventory to final location and condition. The
cost of storing finished goods inventory is expensed and hence not
included in the inventory cost.
Financial Reporting And Analysis MCQ - Financial Reporting And Analysis Section 2
Tax related duties are an expense and increase the purchase price of
inventories.
Transport and handling costs increase the cost of inventory. Trade
discounts and rebates reduce the cost of inventory.
Specific identification best matches the physical flow of the inventory
items because it tracks the actual units that are sold.
