Financial Reporting and Analysis Q226
226Kevin Corporation Limited prepares its financial statements in accordance with IFRS. The inventory related costs incurred during the year include the following:
| Raw materials | $56,000 |
| Direct labor | $40,000 |
| Storage of finished goods | $18,000 |
| Abnormal costs | $6,000 |
| Transportation of raw materials | $10,000 |
The total inventory cost recorded is closest to:
- Option : B
- Explanation : Inventory cost = Raw materials + Direct Labor + Transportation Inventory cost = 56,000 + 40,000 + 10,000 = 106,000. Abnormal cost and storage cost of finished goods are excluded from the cost of inventory.
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