How do I value inventory of finished goods?
Was advised by a SCORE counselor to count it as cogs + labor cost. I count and adjust inventory on hand at the end of every month. But when I follow this approach I notice that the value is aritificially inflated by the amount of the labor component, thus making my cogs appear very low.
We use non-inventory items because we don't have discrete parts to count. We are food manufacturers, so would not be practical to try to use the inventory function in the way a company that assembles kits would, for example.
We are an s corp filing on a cash basis, so need also to be copesetic with the IRS.
