what is a work in progress wip 
in production and supply chain management the term work in progress wip describes partially finished goods awaiting completion wip refers to the raw materials labor and overhead costs incurred for products that are at various stages of the production process wip is a component of the inventory asset account on the balance sheet these costs are subsequently transferred to the finished goods account and eventually to the cost of sales wips are one of the components of a company s balance sheet the wip figure reflects only the value of those products in some intermediate production stages this excludes the value of raw materials not yet incorporated into an item for sale the wip figure also excludes the value of finished products being held as inventory in anticipation of future sales investopedia ellen lindnerunderstanding works in progress wip wip is a concept used to describe the flow of manufacturing costs from one area of production to the next and the balance in wip represents all production costs incurred for partially completed goods production costs include raw materials labor used in making goods and allocated overhead 