In a process costing system,when manufacturing overhead costs are applied to the cost of production,they are debited to:

A) the Finished Goods Inventory account.
B) the Cost of Goods Sold account.
C) the Work in Process Inventory account.
D) the Manufacturing Overhead account.
E) the Raw Materials Inventory account.

Question

Angelina Shivy · Accepted Answer

Final Answer : C, Explanation :  Manufacturing overhead costs are applied to the cost of production in the Work in Process Inventory account, as these costs are incurred during the manufacturing process but cannot be directly traced to specific units of product. Choice A is incorrect because finished goods would not yet have incurred manufacturing overhead costs. Choice B is incorrect because the Cost of Goods Sold account is only debited when the finished goods are sold. Choice D is incorrect because this is the account that is being credited for the application of manufacturing overhead costs. Choice E is incorrect because raw materials do not incur manufacturing overhead costs.

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