The Accuracy of the Work-In-Process Cost Determining Influence on the Endproducts and the Result

Sorin Briciu (), Sorin Teiusan and Ionela Gavrila-Paven

Annals of the University of Petrosani, Economics, 2005, vol. 5, 45-50

Abstract: The accuracy of the work-in-process cost influences the end products’ cost and the profit. Between the work-in-process dimension and the finished goods and profit’s dimensions there is a reversed report. The over evaluation, of the work-in-process, leads to an unjustified diminishing of the finished goods’ cost, and increases also, in an artificial way, the profit. The under evaluation of the work-in-process has an opposite effect, determining the increasing of the finished goods and the decreasing of the profit. Both situations are unfavorable for the enterprise. For reflecting the existing correlations we are presenting below a hypothetical example.

Keywords: accuracy; work-in-process; under evaluation; over evaluation; hypothetical example (search for similar items in EconPapers)
Date: 2005
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