Figure 5 - 3
Robinson Corporation constructs new homes. Assume that Robinson uses a job costing system. During July 2016, 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.
-Refer to Figure 5-3. The journal entry to record labor for Robinson would include a

Question

Quizplus · Accepted Answer

Since Robinson Corporation uses a job costing system, the direct labor cost should be recorded in the Work-in-Process account as it is the account used to accumulate the costs of a specific job. Therefore, the journal entry to record labor should include a debit to the Work-in-Process account for $750. The other options are not correct as they do not reflect the use of the job costing system.