Question

69,200 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 balance 31,900 Completed and transferred to Blending Materials 143,600 Direct labor Overhead 472,000 March 31 balance The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7.200; direct labor, $4,300; and overhead, $20,400. Costs incurred during March in the Blending Department were: materials used, $46,000; direct labor, $17,400; and overhead cost applied to production, $105,000 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. 5 a. Raw materials used in production b. Direct labor costs incurred, c. Manufacturing overhead costs incurred for the entire factory, $626,000. (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, . Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $800,000. g. Completed units were sold on account, $1,470,000. The Cost of Goods Sold was $670,000, 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.) < Prev 3 of 3 Next

Answer 1

Answer-1(a) to 1(f):

No.	Account Title	Debit	Credit
a.	Work in process inventory-Refining Department	143,600
	Raw material inventory		143,600
b.	Work in process inventory-Refining Department	69,200
	Wages payable		69,200
c.	Manufacturing overhead	626,000
	Account payable		626,000
d.	Work in process inventory-Refining Department	472,000
	Manufacturing overhead		472,000
e.	Work in process inventory-Blending Department	662,000
	Work in process inventory-Refining Department		662,000
f.	Finished goods inventory	800,000
	Work in process inventory-Blending Department		800,000
f.	Account receivable	1,470,000
	Sales revenue		1,470,000
f.	Cost of goods sold	670,000
	Finished goods inventory		670,000