Olson Corporation Constructs New Homes

question 170

Multiple Choice

Olson Corporation constructs new homes.Assume that Olson uses a job costing system.During May of the current year, the following transactions occurred: Olson purchased $4,500 of lumber on account.
Olson used $3,750 of lumber in production and incurred 50 hours of direct labor hours at $15 per hour.
Depreciation of $1,500 on equipment used to build new houses was recorded.
A house that was completed last period at a cost of $150,000 was sold for $180,000 in cash
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The journal entry to record the requisition of lumber for Olson would include a

• A) debit to Work-in-Process of $4,500.
• B) debit to Materials Inventory of $3,750.
• C) credit to Finished Goods of $3,750.
• D) debit to Work-in-Process of $3,750.

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Definitions:

Bedroom Communities

Bedroom communities are residential suburbs or towns where residents typically commute to a larger city for work, primarily serving as living spaces rather than commercial or industrial centers.

State And County Capitals

The administrative centers where the governmental offices and officials of a state or county are located.

Specialization In Manufacturing

The process of focusing production on a limited scope of products or tasks to gain efficiency and improve expertise.

American Cities

Urban areas in the United States that serve as centers of population, culture, economy, and political activities.