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In the chapter cost classification the classification of costs is done by four methods and in classification by fiction the production or non-production costs are related with the valuation of inventory
Now my question is
why is valuation of inventory related to the production and non-production costs??Inventory in a manufacturing company is always valued at the cost of production. As you will see in later chapters, for management accounting it can be valued at either just the variable cost of production (marginal costing) or at the full cost of production including the absorbed fixed production costs (absorption costing).
However all of this is explained in later lectures.
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