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accounting for materials

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › accounting for materials

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.
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  • February 11, 2015 at 4:10 am #227770
    amna
    Participant
    • Topics: 92
    • Replies: 93
    • ☆☆

    is the cost of holding always depended on the purchase price?

    February 11, 2015 at 11:22 pm #227957
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54752
    • ☆☆☆☆☆

    No.

    If you watch the free lecture, then you will see that I discuss the sorts of costs there could be.

    For example, there could be costs involved in keeping frozen goods cold – these holding costs would not be affected by the purchase price.
    However, a likely important cost is the interest cost on the money tied up in inventory – this holding cost is affected by the purchase price.

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