The following is an extract from the Sudzucker AG 2003 Annual Report:

Inventories are stated at acquisition or production cost using average cost or first-in, first-out.

As set out in IAS 2 the production cost of work in progress and finished goods includes ... a proportion of administrative expenses.

Explain

(a) why the company is using both the average cost and first-in-first-out methods and (b)

the expenses that might be included under the administrative expenses heading.