When manufacturing overhead is applied to production, it is added to:
A) the Cost of Goods Sold account.
B) the Raw Materials account.
C) the Work in Process account.
D) the Finished Goods inventory account.

Question

Quizplus · Accepted Answer

Manufacturing overhead is applied to production in order to allocate overhead costs to the products being produced. It is added to the Work in Process account, which represents the cost of the products that are in various stages of production. The other options (A, B and D) are not correct because manufacturing overhead is not directly related to the Cost of Goods Sold, Raw Materials or Finished Goods inventory accounts.

When Manufacturing Overhead Is Applied to Production, It Is Added