AS2

Go to ICAI.org

Jitendar this is not the way to speak..Kindly let me know where i will be find in the icai.org

So i will read from there

Dinesh Acc to AS-2

Cost Components are

1.Cost of Purchase

2.Cost of Converstion

3. Other costs are included in the cost of inventories only to the extent that they are incurred in bringing the inventories to their present location and condition. For example, it may be appropriate to include overheads other than production overheads or the costs of designing products for specific customers in the cost of inventories.

Cost = Cost of Purchase + Cost of Conversion + Other Costs

Cost of Purchase = Purchase price+ Duties, taxes + Carriage inward etc LESS: (trade discount+ Rebates+ duty drawbacks etc)

Cost of Conversion = Prime Cost(Direct Mat, Labour & Expenses) + Fixed & Variable Prod. Overhead.

Other Cost= any other incidental cost as reqd for bringing the Inventory to its present location.

Costs EXPRESSLY Excluded: Abnormal loss, Storage cost, Admin Ovd, S & D Ovd., Int & Borrowing costs

Note: The above mentioned data isnt exhaustive, other inclusions & exclusions might be present.

what would be the method of allocating fixed overhead at the time of inventory valuation?