Figure 5-11.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.
-Refer to Figure 5-11. The journal entry to record the requisition of lumber for Olson would include a

Question

Quizplus · Accepted Answer

The correct journal entry for requisitioning lumber for production involves debiting Work-in-Process for the amount of lumber used, which is $3,750. This reflects the transfer of materials from inventory to being used in production.