Overhead costs are
A)not allocated to the Work in Process Inventory account.
B)not charged directly to the Finished Goods Inventory account.
C)expensed in the period in which they are incurred.
D)not considered product costs.

Question

Quizplus · Accepted Answer

Overhead costs are not charged directly to the Finished Goods Inventory account, but instead are allocated to products through the use of predetermined rates and then charged to the Work in Process Inventory account. Overhead costs are considered product costs as they are necessary for the production of goods. However, they are expensed in the period in which they are incurred, rather than being added to inventory accounts.

Overhead Costs Are