alleryWhich expense is NOT excluded from inventory cost?
AAbnormal wastage of material
BStorage costs after production
CDirect labour for conversion
DSelling and distribution costs
Answer & Solution
Correct answer: C. Direct labour for conversion
1. AS 2 excludes abnormal wastage, post-production storage and selling/distribution from inventory cost.
2. Direct labour for conversion is part of cost of conversion and is included.
3. Hence option D is the one NOT excluded.
_Source: ICAI BoS Foundation Paper 1, Ch 4 "Inventories", §3 exclusions list_
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