When using normal costing, which costs never enter the Work-in-Process Inventory account?
A) direct labour
B) direct materials
C) actual overhead
D) applied overhead

Question

Quizplus · Accepted Answer

Actual overhead costs are not included in the Work-in-Process Inventory account under normal costing. Instead, applied overhead, which is a predetermined amount based on a predetermined overhead rate, is included in the Work-in-Process Inventory account. Direct labour and direct materials are always included in the Work-in-Process Inventory account under normal costing.

When Using Normal Costing, Which Costs Never Enter the Work-In-Process