High School

In process costing, WIPs are comprised of DM, DL, FOH, and ______________.

Group of answer choices:
A. Period costs
B. Nothing else, just DM, DL, and FOH
C. Administrative expenses
D. Selling expenses

Answer :

Final answer:

In process costing, WIPs usually includes DM, DL, and FOH. But the last component is not administrative or selling expenses, it, instead, is period costs.

Explanation:

In process costing, Work In Process (WIPs) typically includes direct materials (DM), direct labor (DL), and factory overheads (FOH). However, the last element of WIP is usually not administrative or selling expenses. In traditional accounting, these are considered period costs, not product costs. Therefore, they are not added into the Work In Process account but are rather expensed as incurred in the period.

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