1. Production is a staggered and continuous process.
2. At the end of the accounting year, there must be some unfinished items that are still in the process of production.
3. Unfinished items are called work in process, work is in progress, or semi-finished goods.
4. At the end of the accounting year, work in process is assessed by:
(a) Raw material cost
(b) Labor cost
(c) Overhead cost
5. There are two values for work in process:
(a) work in the (initial) process brought forward from the previous accounting year.
(b) work in the (final) process that is valued at the end of the current accounting year
6. Work in the initial process is mixed and work in the final process is rejected for calculating the production cost for a certain period.