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 Materials Direct labor Overhead March 31 balance Work in Process-Refining Department 33,200 Completed and transferred to Blending 145,600 66,200 473,000 The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $8,100; direct labor, $3,300; and overhead, $21,800. Costs incurred during March in the Blending Department were materials used, $45.000, direct labor $17600; and overhead cost applied to production, $112.000 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 (9) below. a. Raw materials used in production b. Direct labor costs incurred c. 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 $662,000 1. Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, S770,000 g. Completed units were sold on account, $1,430,000. The Cost of Goods Sold was $680,000 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 $207,600 $ 57,000 $29.000 < Prev e to search

Answer 1

No.	Journal Entries				Debit	Credit
a	Work in process inventory-refining				145,600
	work in process inventory - blending				45,000
	raw materials inventory					190,600
b	Work in process inventory-refining				66,200
	work in process inventory - blending				17,600
	Salaries and wages payable					83,800
c	manufacturing overhead				666,000
	accounts payable					666,000
d	Work in process inventory-refining				473,000
	work in process inventory - blending				112,000
	manufacturing overhead					585,000
e	work in process inventory-blending				662,000
	work in process inventory-refining					662,000
f	finished goods inventory				770,000
	work in process inventory-blending					770,000
g	accounts receivable				1,430,000
	sales					1,430,000
	cost of goods sold				680,000
	finished goods inventory					680,000
T-Accounts
Raw Materials Inventory					Manufacturing overhead
Beg bal	207,600				Beg Bal
		190,600	a.		c	666,000	585,000	d
end bal	17,000
					End bal	81,000
work in process inventory-Refining					Accounts receivable
Beg bal	33,200				g.	1,430,000
a	145,600	662,000	e.
b.	66,200
d	473,000
End bal	56,000				End bal	1,430,000
Work in process inventory-Blending					Accounts payable
Beg Bal	57,000						666,000	c.
a	45,000	770,000	f.
b.	17,600
d	112,000
e	662,000
End bal	123,600				end bal		666,000
finished goods inventory					Salaries and wages payable
beg bal	29,000				Beg bal
f	770,000	680,000	g				83,800	b.
end bal	119,000				end bal		83,800
cost of goods sold					Sales
g.	680,000						1,430,000	g.
end bal	680,000				end bal		1,430,000