Question

LO 5.5In a process costing system, which account shows the overhead assigned to the department?

Answer 1

Work in process inventory

Explanation:

The overall costs assigned to the department is shown in a costing system for "work in the process inventory"

Work in the process stock shows all costs of the product manufacture and the applicable overhead is also charged to the process stock account.

With goods at various stages of the production process, the WIP applies to the raw materials, the work and overhead costs involved. WIP is part of the balance sheet inventory asset account. These costs will then be converted to the finished product account and ultimately to sales costs.