work in progress inventory formula

work in progress inventory formula helps businesses calculate the value of semi-finished goods during the production cycle. The formula typically used is: Beginning WIP Inventory + Manufacturing Costs – Cost of Goods Manufactured = Ending WIP Inventory. Tracking work in progress is important for understanding production efficiency, cost management, and accounting accuracy. Manufacturers rely on this metric to analyze bottlenecks and resource allocation, especially in industries like automotive, electronics, or apparel where goods pass through multiple stages before completion.