In a process costing system, where do production costs go when all production work is completed in the process centers?

In a process costing system, once all production work is completed in the process centers, the production costs are transferred to finished goods inventory. This step represents the final phase of the production process, where all expenses associated with the production—such as direct materials, direct labor, and allocated manufacturing overhead—are accumulated and recorded.

The movement of costs to finished goods inventory signifies that these products are now ready for sale. From this inventory, goods can be sold, and the costs will eventually be moved to the cost of goods sold when the products are sold to customers. This system helps in tracking the costs incurred at each stage of production and ensures accurate financial reporting.

The other options highlight different aspects of the accounting process that do not relate directly to the completion of production in a process costing scenario. Selling, general, and administrative expenses relate to overhead not directly tied to production. Manufacturing overhead is a cost category but does not represent where completed production costs are recorded. Raw materials inventory pertains to the input costs prior to production, rather than completed goods. Therefore, the transfer of completed production costs to finished goods inventory is crucial for maintaining accurate financial statements and managing inventory efficiently.