The manufacturing overhead recorded in the Work in Process Inventory account is often the same as the actual overhead incurred.

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The manufacturing overhead recorded in the Work in Process Inventory account is not always the same as the actual overhead incurred. This is because the manufacturing overhead applied to the work in process may be estimated based on a predetermined overhead rate and may not always match the actual overhead incurred. At the end of the period, any difference between the applied overhead and actual overhead is adjusted through a process called overhead variance analysis.

The Manufacturing Overhead Recorded in the Work in Process Inventory