What is material overhead ? Why and when there is material overhead ?

SOLUTION

When the assembly is produced and received into inventory, and to

maintain this assembly item and keep it in inventory, some additional cost
has to be consumed such as lighting cost in inventory and inventory
locator cost, so this material overhead cost is different from resource cost
and resource based overhead cost and department overhead cost. For
resource/resource based overhead/department overhead, we need to
charge them to wip job valuation first, then complete them into assembly
by completion transaction - charge resource/res based
overhead/department overhead:
Ej:
Cr resource/overhead absorption account
Dr WIP valuation (resource/overhead) - 1250
then when complete assembly:
Cr WIP valuation (resource/overhead) - 1250
Dr Inventory valuation
But for material overhead, we could NOT charge material overhead to wip
valuation then complete it to inventory, as there is NOT assembly existed
in WIP JOB - thinking about wip job as a special subinventory.
So when complete assembly - the assembly is being produced, we directly
move the value from material overhead absorption to inventory valuation.