Which of the following internal control activities could best prevent direct labor from being charged to manufacturing overhead?
A)Reconciliation of work in process inventory with cost records.
B)Comparison of daily journal entries with the factory labor summary.
C)Comparison of period costs budgets and time sheets.
D)Reconciliation of the unfinished job summary and production cost records.

Question

Quizplus · Accepted Answer

Comparison of daily journal entries with the factory labor summary would ensure that direct labor costs are correctly charged to the appropriate job, rather than being erroneously charged to manufacturing overhead. The other options are important internal controls, but they are not specifically aimed at preventing direct labor from being charged to manufacturing overhead.

Which of the Following Internal Control Activities Could Best Prevent