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 33,800 Completed and transferred to Blending 143,600 78,200 486,000 ? The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7.900; direct labor, $4,200; and overhead, $21,700. Costs incurred during March in the Blending Department were materials used, $45,000, direct labor, $17.900; and overhead cost applied to production, $107.000. 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. $696.000 (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 Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $740,000. g. Completed units were sold on account. $1.500.000 The Cost of Goods Sold was $600.000 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 $ 212,600 $ 58,000 $ 17,000

Answer 1

45000 18800 o b. 96100 C. 696 000 A. WIP Refining department 143600 Cell Blending Department Raw Materials WIP Refing Department 78200 WIP Blending department 17.500 salaries & weyes Payable Menufachining Oraheed 696000 Accounts Payable WIP Refining Departament 486000 186000 Menufacturing Over head ; wip Blending Department Mannstucturing Orenhead wie Blendiy Department wie Refining Department & Finished goods 740000 IP Blending Department 740000 g. i) Accounts Receivable 1500000 Sales 10000 1 Cost of goods sold Finished Goode TE 10food 107000 e. 66 2007 662000 200000 6ooooo

Beg. Bal a. 5. d. (1Р. Wil Refining Department Bending department 33808682090 () BezBolo 5Bodo 74000 (4) 143600 45000 76200 b 17900 486000 de lofoon 662000 79600 719600 Account Receivable Row Materials 1500000 Beg Bal. 212600/188600 11500000 157000 Finished Goals Manufacturing Over hecal 17ood (9 (6 696000 593000 (d) 740000 (g.) Rey Ber Beli V+). 757000 (103000 Accounts Payable 1696000 C Salewis & wagen Payable 6) 19 6100 Sales Cast of goods sold 150.000 (2 G 68oooo

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