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.Which of the following should be included in the journal entry to record labour for Triple M?

Question

Quizplus · Accepted Answer

The cost of direct labour should be recorded in the Work in Process account, as it is a component of the production process. Therefore, the journal entry should include a debit to Work in Process for $750 for the direct labour cost.

Triple M Corporation Manufactures Module Homes