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Work in progress for apparel manufacturing firm

Sam (p) (27 Points)

08 October 2012

Hi,

Can you please tell me what is the GAAP for Work In Progress and How does one calculate WIP for an Apparel Manufacturing Firm.

Also is it mandatory to enter WIP?

Thank you

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3 Replies

ramcharan (articled assistent) (367 Points)
Replied 08 October 2012

your question is not clear brother make it cleat by posting everything that you get on your mind

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Sam (p) (27 Points)
Replied 08 October 2012

Originally posted by : ramcharan
	your question is not clear brother make it cleat by posting everything that you get on your mind

What I wish to know is, what is the generally accepted practice for valueing your WIP for a garments manufacturing firm. Is process valuation the general principle which is accepted or another one.

We have a no. of processes involved in manufacturing i.e. cutting, printing, embroidery etc. so do I need to ascertain the cost of each process and derive the value or is there another principle which I can follow and is correct?

Sam (p) (27 Points)
Replied 08 October 2012

Another question that comes in my mind is, if we have to use process accounting, then for example a particular item of mine has completed the particular process but the bill for that process has not been raised by the contractor, should that process be included in the valuation of WIP.

Example: a particular Design has come back from embroidery works on 29th March, but the bill was not issued by the contractor until 4th April. Should the process cost of embroidery be considered for WIP for end of the year?