An organization finds that it has no beginning or ending Work-in-Progress (WIP) Inventory due to the way that it has set up its production operations. A company like this would not have to be concerned with assessing or calculating equivalent units of production. Which of the following is true for a company with no beginning or ending WIP Inventory in the production process?
A) No beginning WIP Inventory means that final units were moved to ending WIP inventory.
B) No beginning WIP Inventory means each unit worked on during the period was residual from the previous period.
C) No ending WIP Inventory means that all production costs were moved to Finished Goods.
D) No ending WIP Inventory means there could be a large number of unfinished units to count.

Question

Quizplus · Accepted Answer

This question requires understanding the implications of having no beginning or ending WIP Inventory in the production process. Choice C is the only answer listed that correctly summarizes what having no ending WIP Inventory would mean in the event that the units have been sold.

An Organization Finds That It Has No Beginning or Ending