Asked by Larry Egerton on Apr 28, 2024
Verified
Which of the following statements is not correct regarding work in process?
A) Work in process is partially completed inventory.
B) Work in process consists of direct labour, direct material and allocated manufacturing overhead.
C) Work in process is debited as product costs are incurred.
D) Work in process is credited when goods are sold.
Work in Process
Inventory that includes all items that are in the process of being produced but are not yet complete.
Product Costs
Costs that are directly tied to the production of goods, including materials, labor, and overhead.
Direct Labour
The work effort provided by employees who are directly involved in the production of goods or delivery of services.
- Acquire knowledge about the trajectory of costs in manufacturing, moving from work in process to finished products, and the effects on financial documentation.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
D
Explanation :
Work in process is not credited when goods are sold, but rather debited to finished goods and then credited to cost of goods sold when sold.
Learning Objectives
- Acquire knowledge about the trajectory of costs in manufacturing, moving from work in process to finished products, and the effects on financial documentation.