Concept explainers
Concept introduction:
Work in Progress inventory means the stock which is still in the process of production.
Finished Goods inventory means those goods on which the work of production is completed and they are available for sale.
Cost of goods sold means calculate the amount of cost on that inventory which is sold in the market.
Requirement-1:
To calculate:
Amount of the labor cost transfer to WIP, Manufacturing overhead and on selling, general and administration overhead.
Concept introduction:
Work in Progress inventory means the stock which is still in the process of production the work on these goods still not completed.
Finished Goods inventory means those goods on which the work of production is completed and they are available for sale.
Cost of goods sold means calculate the amount of cost on that inventory which is sold in the market.
Requirement-2:
Why some labor cost related to WIP, some as manufacturing overhead, and some as period cost?
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