Businesses need to keep track of inventory to maintain their efficiency. For a manufacturer, the process of tracking inventory is complicated by the fact that not all inventory is complete -- as some is in the form of raw material and others in the form of work-in-process. Calculate the value of goods completed to see how much of a firm's inventory takes the form of finished goods available for sale.
Add the cost of raw materials from the beginning of the period and the cost of raw materials purchased to give you the total cost of raw materials available.
Subtract the ending raw materials inventory to get the total materials used.
Add up the cost of indirect labor, indirect materials, depreciation, insurance and property taxes to get the total manufacturing overhead.
Add the direct labor costs and the value of the raw material used to the manufacturing overhead to get the total manufacturing costs.
Add the value of beginning work-in-process inventory.
Subtract the ending work-in-process inventory. This will give you the value of goods completed during the period.