Question

What is the purpose of completing and transferring products out of production (WIP) to Finished Goods?

1) To prepare the products for sale
2) To store the products temporarily
3) To discard the products
4) To send the products for further processing

Answer 1

Transferring goods from WIP to Finished Goods prepares them for sale, allows for efficiency assessments, and company financials updating.

Step-by-step explanation:

The purpose of completing and transferring products out of production (WIP) to Finished Goods is primarily to prepare the products for sale. This stage signifies the end of production and the readiness of products to be delivered to customers or held in inventory for future sales. The transition to finished goods also enables a company to assess the efficiency of the production process, update financial records to reflect the value of inventory, and manage company resources effectively.