CERTYNEX IFRS ACADEMY

Dunelle, which buys materials and manufactures furniture, must determine the cost of its inventories. Which statement correctly describes the components of that cost?

Only the invoiced purchase price, all other costs being recognised as expenses.

The costs of purchase, the costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

All costs incurred by Dunelle during the period, including selling and general administrative costs, allocated pro rata to the quantities remaining in inventory at the reporting date.

The expected selling price of the furniture, less a normal margin, regardless of the amount actually incurred.