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
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Working capital management
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@ 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
In WIP we assumed that raw material is 100% incurred while labour nd oheads r 50%. thats why in silent question we take RM 100%, LABOUR ND OVERHEAD 50%.
when there is new company why we add WIP material with current asset raw material
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