Question

Lubricants, Inc., produces a special kind of grease that is widely used by race car drivers. The grease is produced in two processing departments-Refining and Blending. Raw materials are introduced at various points in the Refining Department. The following incomplete Work in Process account is available for the Refining Department for March: March 1 balance Work in Process-Refining Department 30,700 Completed and transferred to Blending 141,600 70,200 474,000 Materials Direct labor Overhead March 31 balance ? The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7,000; direct labor, $3,100; and overhead, $20,600. Costs incurred during March in the Blending Department were: materials used, $46,000; direct labor, $16,700; and overhead cost applied to production, $103,000. Required: 1. Prepare journal entries to record the costs incurred in both the Refining Department and Blending Department during March. Key your entries to the items (a) through (g) below.

1. Prepare journal entries to record the costs incurred in both the Refining Department and Blending Department during March. Key your entries to the items (a) through (g) below.

2. Post the journal entries from (1) above to T-accounts. The following account balances existed at the beginning of March. (The beginning balance in the Refining Department’s Work in Process is given in the T-account shown above.)

Answer 1

Credit OD Transaction General Journal Debit a work in Process-Refinning Department $ 141,600 work in Process - Blending Department $ 46,000 Raw materials (To record issuance of raw materiali & 187,600 Work in Process - Refining Department $ 70,200 work in Process-Blending Department $ 16, 700 salaries and wages Payable Il to record direct labor cost incwued) & 86,900 $ 626,000 $ 626,000 al Manufacturing overhead Accounts Payable (To record manufacturing expenses $474,000 du work in Process - Refinning Department $ 474,000 Manufacturing overhead (To record overhead cost applied) $ 103,000 di2) work in process - Blending Department $ 103,000 Manufacturing overhead (To record overhead lost applied

Work in Process - Blending Department $622,000 work in Process - Refining Department (To recard transfer of semifinished unit $ 622,000 & 770,000 f. I finished Goods work in process-Blending Department (To record transfer of completed units) $ 770,000 g.D $ 1,490,000 Accounts Receivable Sales To record sales on account) $ 1,490,000 $ 620,000 g.12 Cost of goods sold Finished goods I(To record cost of goods sold) $ 620,000 Accounts Receivable 1,490,000 Raco materials Begi bal. & 210,600 / (1 187,600 19) Endebal, $ 23,000

work in process Refining Department Beg Bali & 30,700 (a) 4 141,600 ef & 622,000 >) 70,200 d) 9474,000 UDMR in Process Blending Department Begi bal $48,000 $ 46,000 $770,000 (6) $ 16,700 d $ 103,000 (e) $ 622,000 Endibal. | $ 94,500 Endi bal $65,700 Goods finished Beg.bal, $27,000 42 $770,000 Manufacturing overhead c) $626,000 d) ST1,000 $ 620,000 End.bal. $49,000 End.bal $177,000 Accounts Payable ) $626,000 Salaries and wages Payable 0 $ 86,900 Sales Cost of Goods sold 192 $ 620,000 gp$ 1,490,000 Calculation: d) Manufacturing overhead = Manufacturing overhead Refining Department & mantly acturing over head Blending Depar- $ 474,000 + $ 103,000 - $ 577,000 ritment