Final answer:
The false statement about plant utility costs is that they increase the Work-in-Process Control account; instead, they are allocated through the Manufacturing Overhead Control account because they are considered indirect costs.
Step-by-step explanation:
The question is asking which statement is false in relation to plant utility costs in a manufacturing setting. The statements given are that the source document for these costs is the utility bill, that such costs increase the Manufacturing Overhead Control account, that the costs increase the Work-in-Process Control account, and that these costs are considered an indirect cost. The correct answer is that the statement 'the cost increases the Work-in-Process Control account' is false. Plant utility costs are generally regarded as indirect costs and are allocated to products through the Manufacturing Overhead Control account, not charged directly to the Work-in-Process Control account. This Work-in-Process account typically reflects the direct costs associated with production, like labor and raw materials. It is important to understand the different types of costs in manufacturing, like variable costs and fixed costs. Variable costs such as labor and raw materials, change with the level of output. These costs are treated differently than fixed costs, such as plant utility costs, which remain constant regardless of the level of production.