It Is Generally Possible for Small Companies to Have All

question 81

Multiple Choice

It is generally possible for small companies to have all of the following except for

• A) adequate documents and records.
• B) physical controls over assets.
• C) competent, trustworthy personnel.
• D) internal auditors.

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Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and considered a variable cost.

Factory Overhead

All indirect costs associated with manufacturing, such as indirect labor, maintenance, and utilities, that cannot be directly traced to specific units produced.

Manufacturing Costs

Expenses directly related to the production of goods, including direct materials, direct labor, and manufacturing overhead.

Work in Process Inventory

Goods partially completed during the manufacturing process, including labor, raw materials, and overhead costs.