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 32,300 Completed and transferred to Blending 145,600 72,200 477,000 Materials Direct labor Overhead March 31 balance The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7,500; direct labor, $4,000; and overhead, $20,800. Costs incurred during March in the Blending Department were: materials used, $44.000: direct labor, $16,800, and overhead cost applied to production, $98,000. 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. c. Manufacturing overhead costs incurred for the entire factory, $636,000. (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, $652,000. f. Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $730,000. 9. Completed units were sold on account, $1,360,000. The Cost of Goods Sold was $680,000. 2. Post 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 $ 206,600 $ 54,000 $ 11,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 (9) below. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 3 4 5 2 6 7 8 > Record issuance of raw materials to Refining and Blending Department. Note: Enter debits before credits Transactions General Journal Debit Credit 8. Record entry Clear entry View general Journal

Answer 1

Credit Transactions General Journal Debit Work in Process. Refining Department $145,600 work in process - Blending Department $ 44,000 Raw Materials (to second issuance of raw materialy $189,600 Work in Process - Refining Department $72,200 Work in Process - Blending Department $ 16,800 Salaries and wages Payable Yo second direct labor cost incurred) $89,000 Manufacturing Overhead $ 636,000 Accounts Payable $636,000 (to record manufacturing expenses) d (1) Work in Process - Refining Department $ 477,000 Manufacturing overhead $477,000 He read overhead cost applied) d(2) Work in Process - Blending Department $98,000 He second overhead coat applied) Manufacturing Overhead $98,000

$652,000 work in Procey - Blending Department $650,000 Work in Process - Refining Department Ho second transfer of semifinished units) of finished Goods $730,000 Work in Process - Blending Department to second transfer of completed units $730,000 $1,360,000 gu) Accounts Receivable Sales Ho record sales on account) ى $1,360,000 $680,000 g (2) cost of Goods sold finished Goods ( (10 recond cost of goods sold) $ 680,000 of Accounts Receivable 1 g 1,360,000 Raw Materials Beg. Bal. $206,600 has $189,600. End. Bat $17,000

Work in Process Blending Department Work in Process Refining Department Beg Bat ($32,300 has $145,600 e (e $652,000 Uby $ 72,200 (d, $ 477,000 Beg Bal. $ 54,000 009 #44000 443 $730,00 las (b) (d, 16,800 $90,000 $652,000 ( leg End Bal. 1$ 75,100 Endo Ball $134,800 finished Goods Beg Bal. $ 11,000 its $730,000 (g $600,000 Manufacturing Overhead $636,0 000 $575.000 End. Bat) $61,000 End! Bal $61,000l Accounts Payable (9 $ 636,000 Salaries and wages Payable by $ 89,000 Cost of Goods sold Sales 9$ 1,369,000 igs $600,000 Calculation? (d) Manufacturing Overhead = Manufacturing Overhead Refining Department & Manufacturing Overhead Blending Department) $477,000 & $ 98,000 =$5750