In this article we will discuss about the calculation of work in progress using the concept of equivalent production. Production is continuous in most of the process industries. On any given day, there may be stocks of material, and stocks of semi-finished product in each process. Valuation of work-in-progress poses a complicated problem at the time of finalising accounts for [...]
The following article will guide you about how to calculate opening and closing work-in-progress. Accounting with Opening and Closing Work-in-Progress-FIFO Method: FIFO method assumes that those units, which represent work-in-progress at the beginning, are completed first and the units partly complete at the end of the period are units introduced or transferred from the preceding process during the current period. [...]
In this article we will discuss about how to do the valuation of work-in-progress. Equivalent Production: CIMA defines Equivalent Units as "a notional quantity of completed units substituted for an actual quantity of incomplete physical units in progress, when the aggregate work content of the incomplete units is deemed to be equivalent to that of the substituted quantity of completed [...]