Asked by Harun Abdullahi on May 22, 2024
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A manufacturing business reports just two types of inventory on its balance sheet: work in process inventory and finished goods inventory.
Work in Process
Goods in various stages of completion throughout the plant, not including raw materials or finished products.
Finished Goods Inventory
The direct materials costs, direct labor costs, and factory overhead costs of finished products that have not been sold.
Manufacturing Business
A type of business that uses components, parts, or raw materials to make a finished good or product.
- Understand the significance of inventory accounts in a manufacturing business and their impact on financial reporting.
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Learning Objectives
- Understand the significance of inventory accounts in a manufacturing business and their impact on financial reporting.
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