When production costs are debited to Work in Process Inventory, which accounts will be credited? A)...

When production costs are debited to Work in Process Inventory, which accounts will be credited?

A) Raw Materials Inventory, Factory Labor, and Finished Goods Inventory B) Accounts Payable, Factory Wages Payable, and Accumulated Depreciation C) Raw Materials Inventory, Factory Labor, and Manufacturing Overhead

Solutions

Expert Solution

Work In Process as name suggest, it is the place where the production of goods is carried out. Raw materials are added and processed in this place and labor and manufacturing overheads i.e. Conversion Costs are also incurred in this place in converting the raw material into finished goods inventory.

Product Costs includes the cost of raw materials used in production, direct labor cost and manufacturing overheads incurred in manufacturing the product.

Hence, when prodution costs are debited to Work in Process Inventory, the following accounts will be credited:

--- Raw materials inventory

--- Factory Labor

--- Manufacturing Overhead

Hence, the correct option is C) Raw Materials Inventory, Factory Labor, and Manufacturing Overhead

Hope the above explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

ekkarill92 answered 1 year ago

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