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In process costing there is never a balance remaining in Factory Overhead that needs to be closed at period end.
Process Costing
An accounting methodology used in manufacturing where costs are assigned to batches or work units, typically used for homogenous products.
Factory Overhead
All indirect costs associated with manufacturing, excluding direct materials and direct labor costs.
Period End
The conclusion of a financial accounting period, at which time the books are closed and financial statements are prepared.
- Comprehend how process costing accounts for the treatment of indirect materials and factory overhead expenses.
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Learning Objectives
- Comprehend how process costing accounts for the treatment of indirect materials and factory overhead expenses.
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