Work in progress
Work in progress is production that has started but is not yet complete at the measurement date. It can contain materials, labour and assigned production overhead, according to the costing method and progress achieved. Physical units may be partly complete for one cost element but fully complete for another. Work in progress differs from raw material not yet used and finished goods ready for sale. Its valuation must match the purpose and method of the report.
Worked example
A batch of 100 chairs has received all timber but still requires finishing labour. It is work in progress rather than raw material or finished goods.
Common mistake
Do not assume that partly completed units have either zero cost or the full cost of completed units.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | MA | Direct | September 2026–June 2027 |
| FIA | FMA | Direct | September 2026–June 2027 |