Cost of Inventory

CFA Level I FRA
#1

EDIT: Found my answer straight at the source, can disregard this question.

Just reading section 2 of reading 29 about the cost of inventories and I’m unsure about what is included and what is not included in the costs of inventories:

INCLUDED: “all costs of purchase, costs of conversion, and other costs incurred in bringing the inventories to their present location and condition.”

EXCLUDED: “abnormal costs incurred as a result of waste of materials, labour or other production conversion inputs, any storage costs (unless required as part of the production process), and all administrative overhead and selling costs.”

(Institute 395)

Institute, CFA. 2016 CFA Level I Volume 3 Financial Reporting and Analysis. CFA Institute, 07/2015. VitalBook file.

The citation provided is a guideline. Please check each citation for accuracy before use.

How is labour/other production conversion inputs not the same thing as “costs of conversion”?

Also:

https://www.accountingcoach.com/blog/what-are-conversion-costs

suggests that overhead costs and labour are included in conversion costs.

:S

The example backs up the link.

#2

Breaking my head on another aspect of inventory costing.

“International Financial Reporting Standards (IFRS) permit the assignment of inventory costs (costs of goods available for sale) to inventories and cost of sales by three cost formulas: specific identification, first-in, first-out (FIFO), and weighted average cost.”

(Institute 394)

Institute, CFA. 2016 CFA Level I Volume 3 Financial Reporting and Analysis. CFA Institute, 07/2015. VitalBook file.

The citation provided is a guideline. Please check each citation for accuracy before use.

What does that sentence mean? Does it mean two things - 1.) that inventory costs can be assigned to inventory and 2.) that COGS can be assigned by three cost formulas?

Or does it mean that inventory costs and cost of sales can be assigned by three cost formulas?