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: Work in Process-Refining Department March 1 3 1.600 Completed and balance transferred to Blending ? Materials 14 4.600 Direct labor 67,200 Overhead 4 7 6.000 March 3 1 balance ? s The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7,700; direct labor, $3,400; and overhead, $20,500. Costs incurred during March in the Blending Department were: materials used, $45,000; direct labor, $17,300; and overhead cost applied to production, $104,000.

Answer 1

Solution 2:
Raw materials inventory
Particulars	Debit	Particulars	Credit
March 1 balance	$2,05,600.00	Material used	$1,89,600.00
March 31, balance	$16,000.00
Work In Process - Refining
Particulars	Debit	Particulars	Credit
March 1 balance	$31,600.00	Completed and transferred to Blending	$6,82,000.00
Material	$1,44,600.00
Direct labor	$67,200.00
Overhead	$4,76,000.00
March 31, balance	$37,400.00
Work In Process - Blending
Particulars	Debit	Particulars	Credit
March 1 balance	$45,000.00	Completed and transferred to Finished Goods	$7,90,000.00
Transferred from Refining	$6,82,000.00
Material	$45,000.00
Direct labor	$17,300.00
Overhead	$1,04,000.00
March 31, balance	$1,03,300.00
Finished Goods Inventory
Particulars	Debit	Particulars	Credit
March 1 balance	$13,000.00	Cost of goods sold	$6,40,000.00
Transferred from Blending	$7,90,000.00
March 31, balance	$1,63,000.00
Manufacturing overhead
Particulars	Debit	Particulars	Credit
Overhead incurred	$7,16,000.00	Overhead applied	$5,80,000.00
March 31, balance	$1,36,000.00
Cost of goods sold
Particulars	Debit	Particulars	Credit
Finished goods inventory	$6,40,000.00
March 31, balance	$6,40,000.00
Sales Revenue
Particulars	Debit	Particulars	Credit
		Accounts receivables	$14,50,000.00
		March 31, balance	$14,50,000.00