For a Manufacturing Company, Direct Labor Costs Would Be Included

question 113

Multiple Choice

For a manufacturing company, direct labor costs would be included in ________.

• A) only the direct materials inventory to reflect the cost of labor that has worked using those materials
• B) only in the merchandise inventory to reflect the value added in the production process
• C) only in both work-in-process inventory and finished goods inventory
• D) direct materials inventory, work-in-process inventory, and finished goods inventory accounts

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Definitions:

Internal Control System

A process implemented by a company to provide reasonable assurance regarding the achievement of objectives related to operations, reporting, and compliance.

Control Activities

Policies, procedures, and mechanisms implemented by an organization to prevent or detect errors or frauds, ensuring the integrity of financial reporting and compliance with laws and regulations.

Risk Assessment

The process of identifying, evaluating, and estimating the levels of risk involved in a situation, followed by the coordination and economical application of resources to minimize, monitor, and control the probability and impact of unfortunate events.

Idle Cash

Cash that is not currently employed in any investment or operation, therefore not earning any return or interest.