CAS - 22 - Manufacturing cost

Manufacturing cost rules: comprehensive inclusion and allocation principles determine costing for excisable goods and required disclosures.

Manufacturing cost of excisable goods comprises all resource costs used in production-including materials, employee cost, utilities, packing, direct expenses, repairs, quality control, R&D, depreciation and amortisation, rework and manufacturing overheads-and includes inputs received free or at concessional value from buyers; it excludes post-manufacturing expenses, interest and finance costs, abnormal costs, fines and penalties, and subsequent forex changes. Costs must be measured separately for each excisable good and allocated by direct traceability or by cause-and-effect or benefits-received principles, with variable overheads absorbed on actual production and fixed overheads absorbed on normal or higher actual capacity.