In manufacturing account, the work-in-progress at the end of the year is
Answer Details
In manufacturing account, work-in-progress (WIP) refers to products that are partially completed but not yet sold. At the end of the year, the value of WIP is determined by adding up the cost of materials, labor, and overhead incurred in the production process up to that point.
The correct treatment of WIP in the manufacturing account depends on whether it has been completed or not. If the WIP has been completed, its cost will be included in the cost of goods completed during the year, and thus will be added to the cost of goods completed.
On the other hand, if the WIP is not yet completed, it will not be included in the cost of goods completed during the year, but instead will be deducted from the cost of goods completed during the following year.
Therefore, the answer to the question would be "deducted from the cost of goods completed during this year" if the WIP is not yet completed, and "added to the cost of goods completed" if the WIP is completed. The WIP value is not stated separately in the profit and loss account or the prime cost section.