Intermediate Accounting 14th Edition

Published by Wiley
ISBN 10: 0470587237
ISBN 13: 978-0-47058-723-2

Chapter 9 - Inventories: Additional Valuation Issues - Concepts for Analysis - Page 539: CA9-5a(2)

Answer

No. Administrative costs are assumed to expire with the lapse of time and not to attach to the product.

Work Step by Step

Moreover, administrative costs are not directly affiliated to inventories, but are incurred for the benefit of all functions of the entity.
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