Reference no: EM132995990

Problem 1: Costs excluded from the cost of inventory are the following, except:

Option 1: Administrative overheads that do not contribute to bringing inventories to their present location and condition.

Option 2: Transport, handling and other costs directly attributable to its acquisition.

Option 3: Storage costs, unless those costs are necessary in the production process before a further production stage.

Option 4: Abnormal amounts of wasted materials, labour or other production costs.

Problem 2: If a manufacturer ships merchandise to a retailer on consignment, the unsold merchandise should be included in the inventory of the

Option 1: shipper

Option 2: retailer

Option 3: manufacturer

Option 4: consignee