Most manufacturing and retail/distribution companies own (or lease) warehouses. Warehouses can be used to store raw materials, work in process inventory, finished goods and supplies. Warehousing costs may be significant. How should such warehousing costs be treated for financial accounting purposes? Can they be included as part of inventory costs?
The answer depends on the company and the industry it operates in. Generally, manufacturing companies may include warehousing costs related to raw materials and work in process inventory as part of inventory costs. Such costs