Determining WIP Value

Use the WIP Inventory Value report to analyze work in process. The basic procedure for determining WIP value is:

• Determine the cost of components that are consumed from WIP locations or kitted directly to a production ID.

  If the production ID is for rework or teardown, the cost of the assemblies that are issued to production is determined.

• Add any labor, machine, outside processing and overhead costs.

• Add any waste by-product costs.

• Subtract scrapped assemblies.

• Subtract assemblies and primary products, co-products, and by-products that are completed and moved to stock or to another production area.

The result is inventory remaining in process.

Understanding WIP Inventory Value Report Categories

The categories of cost across the top of the report correspond to the categories that are associated with the cost elements. They are:

• Material

• Inbound

• Conversion (labor and machine)

• Conversion overhead

• Outbound

• Other

PeopleSoft Manufacturing further defines each of these categories:

Summarization Category	Definition	PeopleSoft Manufacturing:
Component costs	These lower-level costs are the costs that are associated with the components that are issued to production. If the PID is for rework or teardown, these costs represent the assembly items this-level and lower-level costs.	For each component, multiplies the issued quantity by the component's standard cost as its defined in the Current Costs by Item record. It then combines this-level and lower-level costs for a given cost element.
Earned this level costs	The assembly's labor, machine, subcontract, and overhead costs earned to date based on the assembly operation completions that are recorded. Maintained in the SF_EARNCONCOST record.	Subtracts negative records that are associated with a production ID (due to completion reversals or revaluations) from the total.
Waste by-product costs	Costs that are associated with the disposal or removal of waste by-products.	Adds costs due to waste by-products to the total for the cost category. It is determined by multiplying the completed quantity as stated in the Production Output record by the cost of the waste item.
Less assembly scrap	Maintained in the SF_SCRAPCOST record.	Adds negative records (due to reversals of scrap or revaluations) from the total for the cost category.
Less assembly completions	Costs that are associated with the assemblies that are completed to stock.	Determines this value by multiplying the quantity of assemblies that are completed to stock or another production area by the assembly's standard cost. Includes primary item, co-products, and recycle by-products. It combines this-level and lower-level costs for a cost element.