IAS 2 requires that fixed manufacturing costs be excluded from the cost of inventories,as they cannot be allocated accurately.

Question

Quizplus · Accepted Answer

IAS 2 requires that fixed manufacturing costs be included in the cost of inventories to the extent that they are incurred in bringing the inventories to their present location and condition. Only the portion of fixed manufacturing costs that relates to the current period and current level of production should be included in the cost of inventories.

IAS 2 Requires That Fixed Manufacturing Costs Be Excluded from the Cost