Under marginal costing, which of the following costs would be included in the valuation of closing inventory of finished goods for a manufacturing company filing returns under the Companies Income Tax Act (CITA) Cap C21 LFN 2004 (as amended)?

Under marginal costing, inventory is valued at variable production cost only. Fixed production overheads are treated as period costs and charged in full to the income statement in the period they are incurred. Selling costs (whether variable or fixed) are never included in inventory valuation under any costing method. Note that for tax purposes under CITA, the FRCN-adopted IAS 2 standard (absorption basis) governs statutory accounts.