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W I P

RAJA P M ("Do the Right Thing...!!!") (128091 Points)

03 July 2017

A mfg company Purchase goods and process then to Sale. How to define WIP Between purchase, process and Sale? Any formula ll be use this calculation...? If any formula please tell me the formula..
Please reply experts...
Thanks and regards
P. M. RAJA

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10 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (176768 Points)
Replied 03 July 2017

A method suggested by ICAI....... attached

Attached File : 1648935 20170703080528 process operation costing icai.pdf downloaded: 182 times

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 03 July 2017

Dear Sir.,
Thank you for the Reply and Thank you so Much....

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 03 July 2017

Sir.,
Have any other simple formula to give to follow the process to that mfg company's Accountant

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (176768 Points)
Replied 03 July 2017

Yes, there are simpler steps for estimations, but follow the link for better understanding.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (176768 Points)
Replied 03 July 2017

1.Divide the total production costs for the period by the total number of equivalent units produced to determine your cost per unit. Multiply the cost per unit by the equivalent units sitting in work-in-process inventory at the end of the period to calculate the value of ending WIP inventory.

2. The calculation of ending work in process is:

Beginning WIP + Manufacturing costs - Cost of goods manufactured = Ending work in process

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 03 July 2017

Above 2nd option is Then How to calculate purchase and sales details and WIP