A process costing system records all factory overhead costs incurred directly in the Work in Process Inventory accounts.

Question

Quizplus · Accepted Answer

Factory overhead costs are not recorded directly in the Work in Process Inventory accounts in a process costing system. Instead, they are accumulated in separate accounts, such as Manufacturing Overhead or Factory Overhead, and are allocated to the appropriate production departments or processes based on predetermined rates or formulas.

A Process Costing System Records All Factory Overhead Costs Incurred