Work in progress calculator

Use our free work in progress calculator to find your WIP inventory instantly. Use it for smarter production and financial planning.

Beginning WIP inventory

Manufacturing costs

Cost of finished goods

Work in progress inventory

$ 0.00

What is work in progress inventory?

Work in progress (WIP) inventory refers to the value of goods that are still in the production stage but are not yet finished products. These are items that have started their manufacturing journey, like raw materials have been issued, labor is being applied, and overhead costs are accumulating, but the final product is not ready for sale.

What you need to know?

WIP helps businesses understand how much capital is tied up in partially completed goods.
It provides insights into production efficiency and helps identify bottlenecks in the manufacturing process.
WIP can be estimated using job costing, process costing, or standard costing. The method chosen affects the accuracy of the result

How is work in progress calculated?

Work in progress is calculated by taking into account the manufacturing costs and finished goods.

Work in progress = Beginning work in progress inventory + manufacturing costs − finished goods

Why is it important to calculate work in progress inventory?

Accurate financial reporting

WIP ensures that balance sheets reflect the true value of inventory, preventing overstated profits or understated assets.

Better production planning

Knowing how much inventory is mid-production helps managers identify bottlenecks, allocate resources effectively, and adjust production schedules.

Informed decision-making

Understanding WIP helps managers evaluate efficiency, set realistic delivery timelines, and decide whether to speed up or slow down production.

Frequently asked questions

Consistently high WIP can indicate production bottlenecks, inefficient workflows, and overproduction relative to demand. This ties up cash in semi-finished inventory and may signal the need for process optimization.
Adopting lean practices like Just-in-Time (JIT) can lower WIP levels, minimize waste, and improve production flow, resulting in faster turnaround and less capital tied up.
WIP includes direct materials, direct labor, and manufacturing overhead for goods currently in production.

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