CAS : 06

Material Cost
Classification of Cost Measurement of Cost Assignment of Cost
Presentation & Disclosures

Valuation of Receipt of Mat Valuation of issue of Assignment of Mat

Mat Cost
Purchased Mat Self Mfg Mat Direct Cost :
Pur Price Direct Mat Consistently use any
+ Freight inwards + Direct Labour one of the method: 1- Job work cost shall be
+ Duties & Taxes + Direct Ovhd form part of material
+ Insurance FIFO cost
+ Direct Exp Not to Include: LIFO 2- Sub contracted cost
(-) Trade Dis Administrative Oh Weighted Average shall form part of
(-) Rebate Finance Cost Etc material cost
(-) Refundable tax Marketing Cost
(-) Subsidies/Grant For Captive Indirect Cost :
Consumption go to Allocate only if they are
Not Form part of Mat Cost : CAS -4. significant over :
1- Finance Cost 1- Tools,
2- Penalty 2- Stores,
3- Demurrage 3- Spares,
4- Detention charges 4- Jigs & Fixtures,
5- Consumable Stores
Changes in Forex Rate : etc.
1- Conversion on the date of
transaction
2- Any subsequent changes shall form
part of material cost

Normal Loss : shall be absorbed by good

units.
Abnormal loss : exclude from material cost

Disclosures :

1- Quantity and rates of major items of material shall be disclosed.

2- Major items are those who forms 5% of cost of material.