What is excluded from Cost of Materials?
Materials that are bought but not put into production or consumed (these should be reported in the Inventories Item. Depreciation charges against the plant and equipment (rent and rental allowances, interest payments, royalties and patent fees). Machinery and equipment chargeable to fixed asset accounts (these should be reported in the Capital Expenditures Item). Materials, supplies, machinery and equipment used in the construction of new structures or additions to the plant that are charegeable to the fixed assets account (these should be reported in the Capital Expenditures Item). Overhead costs (advertising, telephone, insurance, engineering and marketing charges) UNLESS charges for such services are included in the price of the materials.
