Question

Lubricants, Inc., produces a special kind of grease that is widely used by race car drivers. The grease is produced in two processingg 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: Work in Process-Refining Department March alance 34,300 Completed ana transterre to Blending Materials Direct labor Overhead March 139,600 81,200 475,000 balance The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $9,000; direct labor, $5,000; and overhead, $20,300. Costs incurred during March in the Blending Department were: materials used, $46,000; direct labor, $17100; and overhead cost applied to production, $109,000. 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. a. Raw materials used in production. b. Direct labor costs incurred Manufacturing overhead costs incurred for the entire factory, $666,000. (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, $632,000 f. Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $790,000. g. Completed units were sold on account, $1,380,000. The Cost of Goods Sold was $690,000 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.) Raw materials Work in process-Blending Department Finished goods $ 208,600 $40,000 $ 22,000 Complete this question by entering your answers in the tabs below

Answer 1

Journal entries:
S.no.	Accounts title and explanations				Debit $	Credit $
a.	Work in process inventory-Refining Dr.				139600
	Work in process-Blending Dr.				46000
	Raw material inventory					185600
b.	Work in process inventory-Refining Dr.				81200
	Work in process-Blending Dr.				17100
	Wages payable					98300
c.	Manufacturing overheads Dr.				666000
	Accounts payable					666000
d.	Work in process inventory-Refining Dr.				475000
	Work in process-Blending Dr.				109000
	Manufacturing overheads					584000
e.	Work in process inventory Blending Dr.				632000
	Work in process inventory-Refiining					632000
f.	Finished Goods Inventory Dr.				790000
	Work in process inventory-blending					790000
g.	Accounts receivable Dr.				1380000
	Sales revenue					1380000
	Cost of goods sold Dr.				690000
	Finished Goods inventory					690000
RAW MATERIAL INVENTORY
Balance		208,600	WIP-Refining		139,600
			WIP-Blending		46,000
Ending Balance		23,000
WORK IN PROCESS INVENTORY- Refining
Balance		34,300	WIP-Blending		632,000
Raw material Inv.		139,600
Wages Payable		81,200
Manufacturing Overheads		475,000
Balance		98,100
WORK IN PROCESS INVENTORY- Blending
Balance		40,000	Finished goods		790,000
Raw material Inv.		46,000
Wages Payable		17,100
Manufacturing Overheads		109,000
WIP-Refining		632,000
Balance		54,100
FINISHED GOODS INVENTORY
Balance		22,000	Cost of Goods sold		690,000
WIP-Blending		790,000
Balance		122,000