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:

Social Responsibility

The obligation of a business to have a positive effect on society on four levels—economic, legal, ethical, and philanthropic.

Business's Obligation

The responsibilities and commitments a business has, including legal, financial, and ethical duties to its stakeholders.

Community

A group of people living in the same place or having a particular characteristic in common, often sharing a sense of belonging or community spirit.

Control Systems

The means to monitor input, transformation, and output so as to identify problems.