Work-in-Process Inventory - Restricted measures the amount of restricted Work-in-Process Inventory at a given time at all locations included for reporting. Restricted implies the inventory is recorded as owned, but may not be current, in good order or available for immediate use. Examples include: Products recorded in quarantaine or inspection, products recorded In Transit.
Work-in-Process Inventory - Restricted may be reported by value or volume depending on purpose. Volume-based reports may overstate the importance of inventories of low-value products. Value-based reports may understate the implications on the need for storage space or orders needed to deplete the inventory.
Valuation of WIP inventory is generally at cost of materials plus production costs (Compare to COGS). The practice of Backflushing generally eliminates or significantly reduces the value or volume of WIP Inventory.
For benchmarking purposes Work-in-Process Inventory - Restricted may be measured as a percentage of total Work-in-Process Inventory (Unrestricted + Restricted + Blocked).Community Importance Rating:
|AE122||Days of WIP Inventory||3||AE122|
|AE1222||Work-in-Process Inventory - Restricted||4||AE1222|