You run Patty's Pies, a neighborhood pie shop that sells products created by local bakers. In your aging of receivables report, you notice that Jenny, your favorite supplier, is more than 90 days late on her bill. Thankfully, you give Jenny the heads up. After all, your aging of receivables report has shown you which suppliers are 30, 60, or 90 or more days late.
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Finance: What is work-in-process invento...3 Views
finance- a la shmoop. what is work-in-process inventory? your company
junk in the trunk makes enema kits for Elephants . what they get stopped up too. [tower with "junk in the trunk" written on it]
just need you know big bags. anyway so you've extruded ten thousand bags. you
need ten thousand giant hooks to hang the bags on palm trees and ten thousand
tube thingies for the you know de new mall. they cost you a total of 60 grand
to produce and are not yet packaged. the product isn't finished.
in fact the rubber hosing and so on has to be made of a special material that
takes three months to fully dry. you know that African climate is hell on rubber.
you also have four tons of rubber in blocks sitting around the factory floor [ants crawl across the floor]
with ants singing to it. and you have a mile of wire you'll eventually Bend into
bag hanging hooks it's just sitting in a coil.
alright you paid for the rubber blocks, and the wire already it's just sitting
there so these elements of product are in process. the product isn't finished
completed or ready to ship. so work in process inventory really just consists
of raw materials at various stages of production. and you know generally work
in processes just sitting on the factory floor versus out the door when it then
becomes a finished goods. and just remember that concept for you next time
you're unpacking a pachyderm. [woman in white coat peeks out from behind an elephant]
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