Which of the following statements regarding work-in-process (WIP) inventory is FALSE?

1. Actual "run" time is usually a significant portion of the material flow time.

2. WIP exists because of flow time.

3. During most of the time a product is "being made," it is in fact sitting idle.

4. Reducing flow time reduces WIP inventory.

5. WIP inventory describes products or components that are no longer raw materials but have yet to become finished products.

Question

Kai Moon

Business

27 April, 21:56

Which of the following statements regarding work-in-process (WIP) inventory is FALSE?

1. Actual "run" time is usually a significant portion of the material flow time.

2. WIP exists because of flow time.

3. During most of the time a product is "being made," it is in fact sitting idle.

4. Reducing flow time reduces WIP inventory.

5. WIP inventory describes products or components that are no longer raw materials but have yet to become finished products.

+2

Answers (1)

Know the Answer?

Anthony Ballard · Answer 1

The correct answer is 4

Explanation:

WIP stands for Work In Progress is the term which is defined as the management of the supply chain as well as the production, describing the finished goods awaiting for completion. It refers to the overhead costs, raw materials and labor. It is element of the inventory asset account shown in the balance sheet.

It is reduced when the cycle time is decreased that is decreasing the time taken or needed to make the product during the process of manufacturing.