Manufacturing Cost Accounting & Finance worked example

WIP Valuation at 40% average completion: a worked example

This worked example runs the wip valuation numbers for a tougher week than the baseline: 40% average completion instead of the typical 55%. Estimates the dollar value locked in partially completed jobs on the production floor.

The inputs for this scenario

  • Open work orders: 85 orders (held at the documented default)
  • Accumulated cost per order: 12,000 $ / order (held at the documented default)
  • Average completion: 40 % (the input this scenario stresses; the baseline uses 55)
  • Unallocated overhead pool: 8,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: WIP value = open orders x accumulated cost per order x completion% + overhead pool.
  • Total wip valuation cost works out to 416,000 $ at these inputs, and this is the headline figure for the scenario.
  • Wip valuation cost per unit works out to 4,894 $ / piece at these inputs.
  • Variable wip valuation cost works out to 408,000 $ at these inputs.
  • Fixed wip valuation adder works out to 8,000 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where average completion sits at 55% and the headline result is 569,000 $, this scenario comes in 26.89% below the baseline at 416,000 $.
  • Use it at period-end inventory close, for cycle-count reconciliations, or to quantify cash tied up in unfinished production for a lean review. A result at this level usually justifies acting on the stressed input before touching anything else, because every other figure in the table is downstream of it.

Results at a glance

  • Total wip valuation cost: 416,000 $ (headline result)
  • Wip valuation cost per unit: 4,894 $ / piece
  • Variable wip valuation cost: 408,000 $
  • Fixed wip valuation adder: 8,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live WIP Valuation calculator, set average completion to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.