Which of the Following Internal Control Activities Most Likely Would

question 60

Multiple Choice

Which of the following internal control activities most likely would prevent direct labor hours from being charged to manufacturing overhead?

• A) Periodic independent counts of work-in-process for comparison to recorded amounts.
• B) Comparison of daily journal entries with approved production orders.
• C) Use of time tickets to record actual labor worked on production orders.
• D) Reconciliation of work-in-process inventory with periodic cost budgets.

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Definitions:

Productive Capacity

The maximum output a system can produce over a set period under normal conditions.

PP&E

Property, Plant, and Equipment - A company's tangible fixed assets that are expected to provide economic benefits for more than one year.

Current Production

The total output of goods and services produced by an economic entity in a current period, reflecting its current level of activity.

Sale of Investments

The process of selling investments such as stocks, bonds, or real estate, typically to generate cash or realize gains.