Final answer:
Allocated overhead costs are indirectly assigned to the WIP inventory using a predetermined rate. These overhead costs include indirect expenses like rent and utilities, which are not directly traceable to specific units.
Step-by-step explanation:
Allocated overhead costs are not typically posted directly into the Work in Process (WIP) inventory account. Instead, these costs are assigned to WIP based on some method of allocation, such as a predetermined overhead rate. Overhead costs generally refer to the indirect costs of production that are not directly traceable to specific units of output, such as factory rent, utilities, and depreciation on production equipment. Overhead costs are spread out over the units produced based on the allocation method chosen, which aims to reflect a fair and reasonable assignment of costs to the products being manufactured.