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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › accounting for materials
is the cost of holding always depended on the purchase price?
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.
