Which account are the costs of the raw materials, direct labor, and miscellaneous manufacturing overhead transferred to when the product is being manufactured?

The costs of raw materials, direct labor, and manufacturing overhead associated with the production of a product are accumulated in the Work-in-Process (WIP) inventory account. This account is specifically designed to track the costs incurred for products that are in the manufacturing process but are not yet completed.

When a product is being manufactured, the costs incurred for its raw materials and direct labor are added directly to the Work-in-Process inventory. Additionally, any manufacturing overhead costs that are incurred, such as utilities or depreciation on manufacturing equipment, are also included in this account. This accumulation of costs in Work-in-Process allows companies to accurately determine the total expenses associated with the production of goods until they are completed.

Once the products are finished, the total costs accumulated in Work-in-Process inventory are then transferred to the Finished Goods inventory account, representing the cost of completed products that are ready for sale. Therefore, while Work-in-Process is critical during the production phase, it ultimately serves as a precursor to Finished Goods, highlighting its integral role in the manufacturing accounting process.