Final answer:
In a process costing system, costs classified as work-in-process inventory are categorized according to the associated production department or process.
Step-by-step explanation:
In a process costing system, costs classified as work-in-process inventory are categorized according to the associated production department or process. Each production department or process is assigned its own work-in-process inventory account to track the costs incurred in that specific department or process.
For example, in a manufacturing company that produces cars, there may be different departments or processes involved, such as the body assembly department, the paint department, and the final assembly department. Costs incurred in the body assembly department would be classified as work-in-process inventory for that department, costs in the paint department would be classified as work-in-process inventory for that department, and so on.