IAS 2 Inventories defines the extent to which overheads are included in the cost of inventories of finished goods.
Which of the following statements about the IAS 2 requirements in this area are correct?
1   Finished goods inventories may be valued on the basis of labour and materials cost only, without including
     overheads.
2   Carriage inwards, but not carriage outwards, should be included in overheads when valuing inventories of
       finished goods.
3    Factory management costs should be included in fixed overheads allocated to inventories of finished goods.
A   All three statements are correct
B   1 and 2 only
C   1 and 3 only
D   2 and 3 only

D