Work in progress. Basic moments

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

This article will discuss what constitutes work in progress. This concept refers to enterprises that produce any product. Let's start with a definition. So, work in progress is a product that has not passed all the stages provided for by the production process. This also includes products that are completely finished, but have not passed the appropriate tests, or do not have a complete set.

What is categorized as work in progress?

Firstly, these are materials that have been received by the production departments but have not been processed, as well as purchased semi-finished products, various components that have not been assembled. Secondly, these are parts, assemblies, various products that are classified as defective. Consider from the point of view of accounting such a category as work in progress. Account 20 is a debit balance. It has the name "main production". It is important for specialists to have an accurate idea of the amount of work in progress, because these data serve as the basis for estimating such an important economic indicator as cost. Wholethe technological process must be documented. Here it is necessary to accurately detail the costs that arise at each stage. Such documents include all kinds of technological schemes, maps, detailed descriptions of processes, and others. They serve as the basis for the formation of estimates and calculations. Sometimes there is a problem in separating the costs related to finished goods and work in progress.

Then they resort to methods of estimating the actual, standard or planned size of the production cost. The calculation of this indicator by direct costs or the direct cost of used raw materials, semi-finished products and other materials is actively used.

Estimation of residuals

Their number, as a rule, is determined in accordance with the inventory data. It is in the process of this operation that the state of the work in progress is established, two important indicators are calculated. This is the cost and quantity (volume) of consumed materials, as well as time costs (based on the data presented in the technological maps). Those balances that are formed at the end of the reporting period in mass and serial production can be estimated at the cost of consumable materials, raw materials and other elements, as well as at direct costs or in the balance sheet at cost (both planned and standard).

If we talk about a single, then work in progressreflected in actual production costs. Information about them can be found in the balance sheet. It is fair to say that it is this method of accounting that allows the management of the enterprise to obtain the most reliable data. The important thing is that, according to accounting rules, finished goods and work in progress must be valued using the same method.