CAS 9 - Packing Material Cost

Question 1

Definition

Answer 1

Cost of material of any nature used for purpose of packing a product

Question 2

Principles of measurement

Answer 2

1. Purchase of packing Material - purchase price- inclusive of all taxes and duties-net of refunds- ….
2. Self Manufactured- DM,DL,DE, POH,AOH( prod)
3. Normal losses are included
4. Abnormal loss is not included
5. Forex components of imp packing- date of trans- fluctations- does not form part of cost
6. Issue of packing mat- Any method- consistently

Question 3

General Principles

Answer 3

1. Finance cost is not included
2. Abnormal cost is not included
3. Imputed cost is included ( only materials)
4. Credit or recoveries shall be reduced
5. Subsidy, grant or incentives shall be reduced
6. Penalties ,damages, fines paid to stat auth not cost
7. Cost-standard rates- variance is part of cost

Question 4

Assignment of cost

Answer 4

1. Direct - commercially viable manner
2. Indirect- based on quantity consumed or suitable basis- tech estimates
3. Re - usable packing mat- number of times or period over which it is expected to be used
4. Primary - Cost of production
5. Secondary - Distribution overheads

Question 5

Disclosure

Answer 5

1. Basis of valuation
2. Abnormal cost is excluded
3. Penalties, damages or fines paid to stat- not incl
4. Subsidy, grant or incentive- reduced
5. Imputed cost inluded
6. Forex
7. Related party