Q. The most likely costs included in both the cost of inventory and property, plant, and equipment are:
- selling costs.
- storage costs.
- delivery costs.
The answer by CFAI, C is correct. Both the cost of inventory and property, plant, and equipment include delivery costs, or costs incurred in bringing them to the location for use or resale.
Why isn’t the answer Option B ?
ACCORDING TO CHATGPT.
Option B, storage costs, is not included in the cost of inventory because inventory is typically recorded at the cost at which it was acquired, and storage costs are incurred after the inventory has been acquired. Storage costs are considered a separate expense and are not included in the cost of inventory. However, storage costs may be included in the cost of property, plant, and equipment as they are incurred as part of the process of acquiring and maintaining the assets.