Under AS 2, which of the following is excluded from the cost of inventories?

1. Cost of inventories includes purchase costs, conversion costs and other costs to bring inventory to its present location and condition. 2. Selling and distribution costs are incurred to sell, not to produce, the inventory. 3. Hence selling and distribution costs are excluded from inventory cost. _Source: ICAI BoS CA Intermediate Paper 1 (Advanced Accounting), Sept 2025 — Q.1(b), AS 2 Valuation of Inventories._