Robinson Corporation constructs new homes. Assume that Robinson uses a job costing system. During July 2018, the following transactions occurred: Robinson purchased $4,500 of lumber on account.
Robinson 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.
The journal entry to record labor for Robinson 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.

Question

Quizplus · Accepted Answer

Since the transaction is related to labor used in production, it should be recorded in the Work-in-Process account. Therefore, the journal entry would include a debit to Work-in-Process of $750.

Robinson Corporation Constructs New Homes