Note 3. Inventories

Inventories are comprised of the following:


	March 31, 2016		December 31, 2015
Raw materials	$	39,766	$	50,204
Work in process		33,807		30,604
Finished goods		46,546		39,028

Inventories	$	120,119	$	119,836

Inventories on consignment at customer locations as of March 31, 2016 and December 31, 2015 totaled $3.9 million and $5.1 million, respectively.

As noted in Note 1 above, we have adopted ASU 2015-11. Therefore, inventories are stated at the lower of cost or net realizable value. Cost is determined using the average cost method. The inventory valuations above were developed using normalized production capacities for each of our manufacturing locations. Any costs from abnormal excess capacity or under-utilization of fixed production overheads are expensed in the period incurred and are not included as a component of inventory valuation.