Triple M Corporation manufactures module homes. Assume that Triple M uses a job costing system. During June of the current year, the following transactions occurred:
Triple M purchased $4,500 of lumber on account.
Triple M used $3,750 of lumber in production and incurred 50 hours of direct labour hours at $15 per hour.
Depreciation of $1,500 was recorded on equipment used to build houses.
A house that was completed last period at a cost of $150,000 was sold for $180,000 in cash.
-Refer to the Figure.What journal entry should be used to record the requisition of lumber for Triple M?

Question

Quizplus · Accepted Answer

The requisition of lumber should be recorded as a debit to work in process, as the lumber is being used in the production process. The amount should be $3,750, as that is the amount of lumber used in production during the period. Therefore, the best choice is D.

Triple M Corporation Manufactures Module Homes