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 38,000 Completed and transferred to Blending 495,000 72,000 181,000 Materials Direct labor Overhead March 31 balance The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $25,000; direct labor, $4,000; and overhead, $9,000. Costs incurred during March in the Blending Department were: materials used, $115,000; direct labor, $18,000; and overhead cost applied to production, $42,000.

Answer 1

Part 1

No.	Account titles and explanation	Debit	credit
a.	Work in Process - Refining Department	495000
	Work in Process - Blending Department	115000
	Raw Materials		610000
b.	Work in Process - Refining Department	72000
	Work in Process - Blending Department	18000
	Salaries and Wages Payable		90000
c.	Manufacturing Overhead	225000
	Accounts Payable		225000
d(1)	Work in Process - Refining Department	181000
	Manufacturing Overhead		181000
d(2)	Work in Process - Blending Department	42000
	Manufacturing Overhead		223000
e.	Work in Process - Blending Department	740000
	Work in Process - Refining Department		740000
f.	Finished goods	950000
	Work in Process - Blending Department		950000
g(1)	Accounts Receivable	1500000
	Sales		1500000
g(2)	Cost of goods sold	900000
	Finished Goods		900000

Part 2

Accounts receivable
(g)	1500000
End. Bal.	150000

Work in Process Refining Department.
Beg. Bal.	38000
(a)	495000	740000	(e)
(b)	72000
(d)(1)	181000
End. Bal.	46000

Work in Process Blending Department.
Beg. Bal.	65000
(a)	115000	950000	(f)
(b)	18000
(d)(2)	42000
End. Bal.	710000

Finished goods
Beg. Bal.	20000
(f)	950000	(g)	900000
End. Bal.	70000

Accounts payable
Beg. Bal.
		225000	(c)
End. Bal.		225000

Sales
Beg. Bal.
		1500000	(g)
End. Bal.		1500000

Raw materials
Beg. Bal.	618000
		610000	(a)
End. Bal.	8000

Manufacturing overhead
Beg. Bal.
C	225000	181000	(d)(1)
		42000	(d)(2)
End. Bal.	2000

Salaries and wages payable
Beg. Bal.
		90000	(b)
End. Bal.		90000

Cost of goods sold
Beg. Bal.
(g)	900000
End. Bal.	900000