Olson Corporation Constructs New Homes

question 119

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 labor for Olson would include a

• A) debit to Finished Goods of $750.
• B) debit to Wages Payable of $750.
• C) credit to Finished Goods of $750.
• D) debit to Work-in-Process of $750.

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Definitions:

Cause

A factor or element that brings about an effect or result.

Hasty Generalization

A logical fallacy where a conclusion is not logically justified by sufficient or unbiased evidence.

Arguments

Reasons given in proof or rebuttal, or discussions aimed at reaching a conclusion through reasoning.

Trout

A common name for several species of freshwater fish belonging to the salmon family, often valued as food and game.