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

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In process costing, an overallocation of manufacturing overhead would typically be adjusted by crediting the Manufacturing Overhead account and debiting the Cost of Goods Sold or relevant inventory accounts, not by directly crediting the Work-in-Process Inventory account.

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