which is included in work in progress under contract costing
Answers
Answer:
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Explanation:
A work-in-progress (WIP) is the cost of unfinished goods in the manufacturing process including labor, raw materials, and overhead.
WIPs are considered to be a current asset on the balance sheet.
Minimizing WIP inventory before reporting it is both standard and necessary since it is difficult to estimate the percentage of completion for an inventory asset.
A WIP is different from a finished good which refers to a product that is ready to be sold to the consumer.
Understanding Works-in-Progress (WIP)
WIP is a concept used to describe the flow of manufacturing costs from one area of production to the next, and the balance in WIP represents all production costs incurred for partially completed goods. Production costs include raw materials, labor used in making goods, and allocated