2025 · Q84
Which one of the following costs is generally not included in computing the cost of inventory?
General Accounting Principles, Auditing and InsuranceFinal accounts
- AAdministration overheads
- BAll cost of purchase
- CNormal wastage of materials
- DStorage cost assuming a special storage is required as part of production process
Explanation
Under AS-2, administration overheads are generally excluded from inventory cost unless they clearly contribute to bringing inventory to its present location and condition. Cost of purchase, normal wastage of materials and necessary storage costs are all included, so administration overheads is the correct answer.