Which of the Following Statements Is Not Correct Regarding Work

question 27

Multiple Choice

Which of the following statements is not correct regarding work in process?

• A) Work in process is partially completed inventory.
• B) Work in process consists of direct labour, direct material and allocated manufacturing overhead.
• C) Work in process is debited as product costs are incurred.
• D) Work in process is credited when goods are sold.

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Definitions:

Variable Overhead

Expenses that vary with production levels, such as costs for power or materials used in the manufacturing process.

Direct Materials

Raw materials and components used in the manufacturing process that are directly incorporated into the final product.

Direct Labor-Hours

Represents the total hours worked by employees directly involved in the manufacturing process.

Variable Overhead

Costs that fluctuate with production volume, such as utilities and raw materials, contrasting with fixed overhead costs.