Advertising costs should be charged to the Manufacturing Overhead account

Question

Quizplus · Accepted Answer

Advertising costs are not considered as manufacturing overhead cost, therefore it should not be charged to the Manufacturing Overhead account. Instead, it should be expensed as Selling, General, and Administrative (SG&A) expense. The predetermined overhead rate is used to apply overhead costs to Work in Progress, which includes indirect materials, indirect labor, and other manufacturing overhead costs.

Advertising Costs Should Be Charged to the Manufacturing Overhead Account