How inventory is being valued? Can factory cast added to inventory ?

Question

Accepted Answer

Inventory is valued based on the cost of acquiring or producing the items. Factory cost can be added to inventory.

Inventory is typically valued using one of the following methods: First-In, First-Out (FIFO), Last-In, First-Out (LIFO), or Weighted Average Cost.
The cost of acquiring or producing the items, including any direct costs (such as purchase price or production costs) and indirect costs (such as transportation or storage costs), is used to determine the value of inventory.
Factory cost, which includes the cost of raw materials, labor, and overhead expenses incurred in the production process, can be added to the inventory.
For example, if a company produces widgets in its factory, the cost of raw materials, labor, and overhead expenses associated with producing those widgets can be included in the inventory value.
It's important to consistently apply the chosen valuation method and accurately track the costs associated with inventory to ensure accurate financial reporting.

Accepted Answer

Yes ofcourse it will be added

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