Asked by Miranda Wilkerson on Apr 27, 2024
Verified
When manufacturing overhead costs are assigned to production in a process cost system they are debited to
A) the Finished Goods Inventory account.
B) Cost of Goods Sold.
C) a Manufacturing Overhead account.
D) a Work in Process account.
Process Cost System
An accounting methodology used to accumulate and assign costs to products or services that are indistinguishable from each other, typically used in manufacturing.
Work In Process Account
An account used to compile all costs (materials, labor, and overhead) related to partially completed goods.
- Learn the techniques for distributing and tracking manufacturing costs in a process cost environment.
Verified Answer
CJ
Charisse JosephApr 27, 2024
Final Answer :
D
Explanation :
In a process cost system, manufacturing overhead costs are assigned to production by debiting them to a Work in Process account. This account represents the total cost of production that is still in progress and has not yet been completed. As the production process continues, additional direct materials, direct labor, and manufacturing overhead costs are added to the Work in Process account until the product is completed and transferred to Finished Goods Inventory.
Learning Objectives
- Learn the techniques for distributing and tracking manufacturing costs in a process cost environment.
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