Regarding Valuation of Closing Stock of Raw Materials

by Srinivas.Thatikonda
(Hyderabad)

India!

India!

Q: I want to know whether storage costs (rent for storage of materials until it is used in production) will be considered for valuation of closing stock of raw materials or not.


A: Very good question Srinivas.

Rent for materials would be considered a manufacturing overhead cost. It would not form part of the value of the closing stock of raw materials. It would, however, form part of the finished goods that are produced at the manufacturing plant.

Please see the lesson on the manufacturing cost statement for more information on overheads and other manufacturing costs.

Comments for Regarding Valuation of Closing Stock of Raw Materials

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Purchase Tax included or not?
by: Anonymous

Should the tax paid for purchase of the materials be included for valuation of raw materials????

Editor: No. Tax is never part of the value of any asset or expense item. So exclude tax.

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