Ending Work in Process

Work in Process is a kind of inventory in which all the goods are near to be finished but still some work needed to be done to count these goods as an completely finished goods inventory. The formula of ending work in progress can be shown as under:-

Ending Work in Process = Beginning Work in Process +Manufacturing cost – Cost of goods manufactured

For example let’s assume that a company XYZ has a work in process inventory of $ 5000, the manufacturing cost of the company is $ 29,000 for that month and the cost of goods manufactured are $30,000 for that month. Now the ending work in process inventory can be calculated as:-

Work in process inventory =5000 + 29,000 – 30,000

Work in process inventory = 4,000

However this formula is only an estimation of the work in process inventory as there are a number of other factors associated with work in process such as rework on the given goods, scarp and spoilage of the goods and different issues like this. These issues has a direct effect on work in process inventory and they reduce the amount of cost associated with ending work in process as most of the expense related to these items is calculated current accounting period. There are also other two practices that are conducted by factories to record ending work in process that involve:-

• Record No Work in Process
• Conduct a count

Other Related Accounting Articles:

• Accounting for Manufacturing Businesses
• Periodic Inventory System Definition
• Work in Process Accounting
• Back flush Accounting
• Back Flush Costing
• Ending Finished Goods Inventory Budget Definition
• Cost of Goods Sold (COGS) Definition
• Cost of Goods Manufactured Definition
• Net Realizable Value
• Liquidity Index