ending work in process inventory calculation
In the above example since the equivalent of 500 units are in progress and it cost 375 to produce each unit the work-in-progress inventory cost is 1875 500 x 375. Types of Process.
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In this latter case inventory essentially shifts directly from the raw materials inventory to the finished goods inventory with no separate work in process accounting at all.
. Ending Inventory per LIFO. In that process the goods held are actually counted and assigned cost based on a consistent method. With a periodic system the ending inventory is determined by a physical count.
Therefore the calculation of cost of goods sold requires an assessment of total goods available for sale from which ending inventory is subtracted. Work in progress accounting involves tracking the amount of WIP in inventory at the end of an accounting period and assigning a cost to it for inventory valuation. This helps determine how much money is tied up in current work-in-progress inventory.
Remember that the last units in the newest ones are sold first. And the complete product inventory cost is 4000 x 375 15000. 1000 units x 8 8000.
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