Work-in-Process Inventory - Blocked measures the amount of blocked WIP Inventory at a given time at all locations included for reporting. Blocked implies the inventory is recorded as owned, but is not considered usable or sellable. Examples include: Scrap.
Work-in-Process Inventory - Blocked 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 - Blocked 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|
|AE1223||Work-in-Process Inventory - Blocked||4||AE1223|