Which of the following is NOT a component of inventory?

Inventory consists of various components that represent different stages of the production process. Raw materials, work in process, and finished goods are all tangible items that are counted as inventory.

Raw materials are the basic inputs used in the production process, work in process refers to items that are in various stages of manufacturing but are not yet complete, and finished goods are products that are ready for sale. These components are essential to inventory management as they help in tracking what a company has at each stage of its production cycle.

On the other hand, manufacturing costs do not refer to physical inventory items but rather to the expenses associated with producing goods, including labor, materials, and overhead costs. While manufacturing costs are critical to understanding the overall financials of production and can impact inventory valuation, they themselves do not constitute inventory. Therefore, identifying manufacturing costs as not part of inventory correctly distinguishes it from the inventory components that contribute directly tothe physical stock on hand.