Up-to-date information about production order status is required to do the task of calculating the cost of work in process (WIP). WIP is the inventory of partially finished goods that are still undergoing production. The cost of WIP is the sum of the material, labor, and overhead costs that have been incurred for the unfinished products. To calculate the cost of WIP, the production order status is needed to determine the quantity and stage of completion of each product in the production process. The production order status can also indicate the actual costs and variances from the planned costs for each production order. By having up-to-date information about production order status, the cost of WIP can be calculated more accurately and timely, which can help to monitor and control the production performance and profitability. References := CPIM Part
2 Exam Content Manual, Version 8.0, ASCM, 2021, p. 28. CPIM Part 2 Learning System, Version 8.0, Module 3, Section B, Topic 1. Production order lifecycle overview. How to Make a Production Order for Manufacturing.