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 Marche Mareh balance Work in Process-Refining Department 32.700 Completed and transferred to Blending 141,600 68.200 Materials Direct labor Overhead The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $8.400; direct labor $3.500; and overhead, $20,800. Costs incurred during March in the Blending Department were: materials used, $14,000, direct labor, $16.200; and overhead cost applied to production, $107.000 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 to below. a. Raw materials used in production b. Direct labor costs incurred. c. Manufacturing overhead costs incurred for the entire factory, $716,000. (Credit Accounts Payable) d. Manufacturing overhead was applied to production using a predetermined overhead rate. e. Units that were complete with respect to processing in the Refining Department were transferred to the Blending Department, $662,000

Answer 1

Debit Credit Transactions General Journal A. Work in Process - Refining Department & 14 Work in Process - Blending Department & 44,000 Raw materials (To record issuance of raw materials) $185,600 Work in Process - Refining Department $68, 200 Work in Process - Blending Department & 16, 200 Salaries and wages Payable (To record direct labor cost incurred) $84,400 Manufacturing overthead. $716,000 Accounts Payable (To second manufacturing expenses) $716,000 ally work in Process-Refining Department $474,000 Manufacturing overhead (To record overhead cost appried) $474,000 a(2) Work in Process-Blending Department $107,000 Manufacturing overhead (To record overhead cost applied) I $107,000

Work in process. Blending Departa Work in Process-Refining Department (To record transfer of semifinished unity cess-Blending Department $662,000 $662,000 f. finished Goods work in Process-Brending Department (To second transfer of completed mort $800,000 $800,000 units, g1 Accounts Receivable sales (To record sales) $1,380,000 $1,380,000 1912) $650,000 Cost of Goods sold I finished Goods Lo recond cost of goods soldy $650,000 (2 Accounts Receivable figs $1,380,000 Raw Materials Begi Bal $213,600 19, $185,600 End.Bal. $28,000 /

Work in Proven Refining Department Beg Bal $32,700 cas $ 11,600 To $662,000 b. $ 68,200 (d, $474,000 Work in Process Blending Department Beg. Bal $50,000 cas $ 44,000 if $800,000 b $ 16,200 id) & 107,000 Le $662,000 End Bal $54,500 End Bal $79,200 finished Goods Bege bal $ 18,000 Like $ 800,000 9 $650,000 Manufacturing Overhead e $716,000 dj $581,000 L End.Bal. $ 135,000 End Bal & 168,000 Accounts odalaries and wages Payable Les $ 716,000 Payable Ч.Чоо Sales Cost of Goods sold 195 $1,380,000 igs $650,000 - Calculation : d. Manufacturing overhead = Manufacturing overhead Refining Department +Manufacturing overhead Blending Department = $474,000 + $ 107,000 = $581,000