Since manufacturing costs (direct materials,direct labor,and overhead)are incurred in the process of manufacturing units of product,these costs are debited to:

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Manufacturing costs are initially incurred during the production process and are accumulated in the Work in Process Inventory account until the units are completed and transferred to finished goods inventory. Direct Materials Inventory, Direct Labor, and Manufacturing Overhead accounts are used to record the costs as they are incurred, but ultimately they are debited to the Work in Process Inventory account. The Cost of Goods Sold account is not debited until the units are sold. Expense accounts are usually used for indirect costs such as selling, administrative, and general expenses.

Since Manufacturing Costs (Direct Materials,direct Labor,and Overhead)are Incurred in the Process