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Sir ,
I have a doubt !
The cost of Direct material /production are Debited to WIP account so is WIP account an expense a/c?? If so what type of account is an Overhead control account. Don’t we credit that a/c for indirect costs?It is not so much an expense account but more of a ‘holding’ account. The costs are debited to the account and then transferred to a finished goods account when they used in the finished goods.
The overhead control account is used to collect all of the various indirect costs (i.e. overheads). The are debited to the account and then transferred to the finished goods account.
Don’t worry too much about the accounts. It is not financial accounting, and little is asked about accounts in the exam (and obviously you cannot be asked to write up any accounts in the exam).
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