costing for pcc-doubt

yes, agood question is asked by you first of all carrying cost includes the cost of carrying material like rent ,interest etc. but if you have oplaced order then you will use that material continuously so in your godam the position of goods changes so it is assumed that you carry the average inventory throughout the year and on the basis of that you find carrying cost.

The carrying cost is the carrying cost p.u. p.a. which means that cost p.u. is used only if the unit has been held in stock throughout the year. Durin the 1st half of the period, the actual stock of material will be higher than avg. inventory and hence the computed carrying cost is understated.During the 2nd half of the period the actual stock will be lower than the avg. inventory, and hence the computed carrying cost is overstated...The understatement and the overstatement above mentioned will nullify or neutralise each other