What is WIP

WIP stands for "Work-in-Progress". It refers to the inventory of products that are in the process of being manufactured or assembled but are not yet complete.

WIP is important for producers to manage their inventory levels and production processes effectively. By tracking WIP, producers can identify which products are in progress, how long they have been in production, and how much they have cost to produce. This information can help manufacturers to optimize their production processes, reduce waste, and improve overall efficiency.

Once the WIP is completed, it is transferred to the finished goods inventory, and the cost of goods sold is calculated based on the total cost of materials and labor used to produce the finished product.