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AS 2 Valuation of Inventory
rent paid for storage of finished goods whether to include this fixed cost in valuation of inventory? The same is not incurred for direct conversion of raw material to fg.
Replies (2)
No it will not included in cost of inventory.
As Per Para 8 of AS-2 , The Cost of Conversion includes Fixed Overhead that are incurred in converting materials into finished goods. Therefore , if the Finished Goods is complete in all respects (ie,ready to sell condition), then rent need not be taken to valuation of inventory.
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