Note 2. Inventories

Inventories are comprised of the following:


	March 31, 2017		December 31, 2016
Raw materials	$	51,022	$	49,205
Work in process		32,829		31,348
Finished goods		32,710		34,298

Inventories	$	116,561	$	114,851

Inventories on consignment at customer locations as of March 31, 2017 and December 31, 2016 totaled $4.4 million and $5.0 million, respectively.

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 underutilization of fixed production overheads are expensed in the period incurred and are not included as a component of inventory valuation.