Question

In a process costing system, when manufacturing overhead costs are applied to the cost of production, they are debited to: Multiple Choice the Finished Goods Inventory account. the Cost of Goods Sold account. the Work in Process Inventory account. the Manufacturing Overhead account. the Raw Materials Inventory account.

Answer 1

Answer:

the Work in Process Inventory account

Explanation:

The journal entry to record the manufacturing overhead costs applied to the cost of production includes -

Debit    Work in Process Inventory account     XXXX

Credit   Manufacturing overhead                      XXXX

As the work is in progress, it cannot be a finished goods inventory or even a cost of goods sold account. Again, raw materials inventory will not come here as manufacturing overhead costs assigned to the cost of production. Therefore, option C is correct.