When perpetual inventories are maintained in a job order cost system, the balance of the Work in Process Inventory account represents:

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When perpetual inventories are maintained in a job order cost system, the balance of the Work in Process Inventory account represents the actual costs for the labor and materials used in uncompleted jobs and an estimate of the overhead associated with these jobs. This is because the perpetual inventory system allows for the tracking of all costs associated with each job in real-time, giving an accurate representation of the costs associated with each job up to the present moment.

When Perpetual Inventories Are Maintained in a Job Order Cost