Unlike merchandising company, a manufacturing company has three categories of inventory which are; raw materials inventory which is an ingredient to manufacture a product, work in process inventory which is going through its processing state and finished goods inventory which is the final product and ready to be sold. To determine : Why does a manufacturing company require three different inventory categories?

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Chapter 18, Problem 16DQ

To determine

Introduction:

Unlike merchandising company, a manufacturing company has three categories of inventory which are; raw materials inventory which is an ingredient to manufacture a product, work in process inventory which is going through its processing state and finished goods inventory which is the final product and ready to be sold.

To determine:

Why does a manufacturing company require three different inventory categories?

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