Figure 5 - 3 Olson Corporation Constructs New Homes

question 28

Multiple Choice

Figure 5 - 3 Olson Corporation constructs new homes.Assume that Olson uses a job costing system.During May 2011, 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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Refer to Figure 5-3.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:

Company's Success

The achievement of specific goals and objectives by a company, often measured by financial performance, market share, or other key indicators.

Administering Pay and Benefits

The process of managing and overseeing employee compensation and benefits packages.

Year-end Bonuses

Financial rewards given to employees at the end of the fiscal year, often based on performance or as part of a holiday tradition.

Salaries

Fixed amounts of money or compensation paid to employees by an employer at regular intervals in exchange for their work.