Question

Warehouse rent paid for storage of finished inventory should be included in the cost of finished inventory. True or false.

Answer 1

Answer:

false

Explanation:

rent is revenue expenditure so it should not be included in cost of finished inventory

Answer 2

The statement is False.

• They are generally included in the period costs.
• Warehouse expenses for raw materials and work-in-process inventory may be included in inventory costs by manufacturing businesses.
• As a result, such expenses become an asset until the inventory is sold, at which time they become an expenditure, the cost of goods sold.
• Warehousing expenses for completed items are expensed as they are incurred in period expenditures and are not included in inventory costs.