Overhead Costs Decrease the Work in Process Inventory Account

question 7

True/False

Overhead costs decrease the Work in Process Inventory account.

---

Definitions:

Direct Labor-Hours

The cumulative hours employees directly participating in the production process have worked.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost of materials.

Variable Manufacturing Overhead

Costs that vary in total in direct proportion to changes in the volume of production, such as indirect materials and utility costs directly tied to production.

Raw Materials

The basic materials from which a product is made, prior to any processing or manufacturing.