Cost of inventory

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Hi all,

Can u please tell me from where the cost of inventory would pick from?. I wish to know this in a series of events especially the cost of WIP & FG.

My Assumption is as follows it would pick the Material cost from Bill of Material & conversion cost from job cards and with it will add my Overheads then these will reflect as my cost of inventory.

Am I wrong? Pls help with process flow of reflecting my inventory cost of WIP & FG.

ERP is irrelevant here. I want a general idea.

Thanks in advance.

Replies (1)

As per AS2 Accounting for inventories the cost of inventories would include all the costs incurred for teh bringing the inventoreis to place of location.

Now the purchase cost would be as per the Invoices received from suppliers.  Other incidental costs would be transportation, freight & other incidental exp incurred.

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