ECONOMICS

Detailed explanation-1: -What is a raw material warehouse? A raw material warehouse is a facility that stores components or materials that will subsequently be used on production lines to manufacture products. These types of centers house unprocessed goods, i.e., those that haven’t undergone a production process.

Detailed explanation-2: -“A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished products, energy, or intermediate materials that are feedstock for future finished products.”

Detailed explanation-3: -Primary sector companies are typically engaged in economic activity that utilizes the Earth’s natural resources, which are sold to consumers or commercial businesses. Companies involved in the processing and packaging of raw materials are also categorized within the primary sector.

Detailed explanation-4: -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.