The Work-in-Process Inventory account of a process is credited when overallocation of manufacturing overhead occurs in that process.

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The Work-in-Process Inventory account of a process is typically debited (not credited) when manufacturing overhead is allocated to that process. Overallocation of manufacturing overhead occurs when the amount of overhead allocated to a process is greater than the actual incurred overhead. When overallocation occurs, the manufacturing overhead account is credited, and the cost of goods sold account is debited to adjust for the overallocated amount.

The Work-In-Process Inventory Account of a Process Is Credited When