As production takes place, all manufacturing costs are added to:

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As production takes place, all manufacturing costs are added to the Work-in-Process Inventory account, which represents the cost of unfinished goods that are currently undergoing production. Once the goods are completed, the costs are transferred to the Finished Goods Inventory account, and eventually to the Cost of Goods Sold account when the goods are sold. The Raw Materials inventory account represents the cost of materials purchased but not yet used in production, and the Manufacturing Overhead account represents indirect costs such as rent, utilities, and depreciation.

As Production Takes Place, All Manufacturing Costs Are Added To