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.

Question

Quizplus · Accepted Answer

The use of time tickets to record actual labor worked on production orders is a control activity that directly relates to the accuracy of the manufacturing overhead costs. By using time tickets, direct labor hours can be accurately recorded and charged to the appropriate production order. This helps prevent direct labor from being charged to manufacturing overhead, which would result in inaccurate product costs. A, B, and D are control activities that relate to the overall management of work-in-process inventory and cost budgets, but they do not directly address the issue of preventing direct labor hours from being charged to manufacturing overhead.

Which of the Following Internal Control Activities Most Likely Would