How to set up WIP items in a formula

Question

We prep ingredients ahead of time and want to be able to track the prepped ingredients once they are in process waiting to be converted to finished product

Answer 1

Hi,

To set up and track Work-in-Progress (WIP) items, you can use a formula to monitor the status of prepped ingredients as they move through the production process. Here’s a step-by-step guide to help you:

1. Identify Key Components

• Beginning WIP Inventory: The value of prepped ingredients at the start of the period.
• Cost of Goods Manufactured (COGM): The total cost incurred to prep the ingredients.
• Cost of Finished Goods: The cost of ingredients that have been converted to finished products.

2. Set Up Your Formula

The basic formula to calculate the ending WIP inventory is:

Ending WIP Inventory=Beginning WIP Inventory+COGM−Cost of Finished Goods

3. Implement in Excel

• Create Tables: Set up tables for each component (e.g., Beginning WIP, COGM, Finished Goods).
• Use VLOOKUP or SUMIF: Use these functions to pull data from your tables into a summary sheet.

4. Track Progress

• Update Regularly: Ensure you update your tables regularly to reflect the latest data.
• Monitor Efficiency: Use the WIP inventory data to analyze and improve your production process.

Would you like more detailed steps on setting this up in Excel or any other specific tool?