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In like manner, a finished goods inventory will also have an inventoriable cost. This will include not only all the costs related to the raw materials, but also the direct labor and any fixed or variable overhead that is incurred while producing those finished goods. If those goods are stored at a rented facility, even the cost of the rental will be accounted for as an inventoriable cost.
Costs associated with a product can be categorized as direct costs and indirect costs. Direct cost, is the cost which can be identified with the product, while indirect costs are not directly accountable to a cost object. Cost of materials, direct labour cost such as wages and salaries are examples of direct costs. Administrative costs and depreciation are some of the examples of indirect costs.