In process costing,factory rent and utilities are debited to the ________.
A) Work-in-Process Inventory account
B) Manufacturing Overhead account
C) Finished Goods Inventory account
D) Cost of Goods Sold account

Question

Quizplus · Accepted Answer

In process costing, factory rent and utilities are considered indirect manufacturing costs, which are included in the Manufacturing Overhead account. This account is used to accumulate all manufacturing costs that cannot be directly traced to individual units of products, such as rent, utilities, depreciation of manufacturing equipment, and indirect labor. These costs are allocated to products based on a predetermined overhead rate and are included in the cost of goods sold when the finished products are sold. Therefore, choice B, Manufacturing Overhead account, is the correct answer.

In Process Costing,factory Rent and Utilities Are Debited to the ________