while estimating working capital . the work in progress calcultion is really confusing why we taking raw material full value and direct labour and overheads 50% completion value kindly pls clear my doubts
sangeetha (student) (24 Points)
15 March 2012while estimating working capital . the work in progress calcultion is really confusing why we taking raw material full value and direct labour and overheads 50% completion value kindly pls clear my doubts
Rahul
(Chartered Accountnat CS)
(1580 Points)
Replied 15 March 2012
@ Sangeetha WIP means partial production i.e goods are not fully complete, they are under processing.
We take 100% material and 50 % labour and OH as it is a logical assumption.
we assume that full material have been issued and labour have worked half and half of overheads are incured
deepak.a.saxena
(student)
(27 Points)
Replied 16 March 2012
kunjan jain
(article)
(31 Points)
Replied 22 May 2012
when there is new company why we add WIP material with current asset raw material
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