Final answer:
The usage of indirect manufacturing resources is recorded in the Manufacturing Overhead account, which includes costs like indirect labor, materials, and other factory-related expenses that are not directly traceable to products. Option C is correct.
Step-by-step explanation:
The usage of indirect manufacturing resources is recorded in the Manufacturing Overhead account. Unlike direct materials, which are traced directly to the product and recorded in the Direct Materials account, and direct labor, which is also traced and recorded separately, manufacturing overhead includes all the indirect costs associated with production.
These costs are not directly traceable to specific units of product and can include indirect labor, indirect materials, and other indirect expenses such as utility costs, depreciation, and maintenance of factory equipment.
When overhead is incurred, it is recorded in the Manufacturing Overhead account and then allocated to the Work-in-Progress account based on a predetermined overhead rate. Upon completion, the costs are then transferred from Work-in-Progress to the Finished Goods account.