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Hello sir,
In BPP study kit the below is the question:
The following data relate to Corn Co, a manufacturing company.
On average:
(a) Accounts receivable take 2.5 months before payment.
(b) Raw materials are in inventory for three months.
(c) Work in progress represents two months’ worth of half produced goods.
(d) Finished goods represents one month’s production.
According to it . WIP shouldnt it be 2/12 why it is 1/12 ?
I just wanted to understand how did they calculate the WIP for materials, labour etc ?I do not have the Study Text (only the Revision Kit) and so I do not have the question.
However from what you have typed I would guess that it is because the WIP is 2 months worth of half produced goods. So 2/12 x 1/2 = 1/12.
Oh we are not suppose to write complete questions here right thats why I didnt pasted the complete question
Isn’t the goods say Raw material in total is 700,000 should be half i.e, 350,000 as they said that half produced goods.
Its a bit tricky language which I am trying to understand here .
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