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Hello!
I would like to ask if there’s an explanation to why we don’t include the CWIP in the total value of units completed ‘last month’ even though it was completed to a certain percentage. The only thing I sort of forked up was that it would go along if there’s going to be a continuation to the question and they’d want us to work it out.And another question would be why do we include the full cost for the OWIP even though a percentage of it is completed, shouldn’t we, if anything, just include the cost for the completion of the units in this current period?
Thanks!
The closing WIP is only part completed and therefore it is only valued at part cost – they are not completed, by definition.
The full cost of the opening WIP is included in the valuation of the units completed during the current period. It is only in the calculation of the unit costs this month that the amount already spent is not included.
Have you watched my free lectures on this? The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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