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 PROCE-Rising Department to blending ateriala Direct la The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $25,000, direct labi $4,000; and overhead. $9,000. Costs incurred during March in the Blending Department were materials used. $115,000, direct labor $18,000, and overhead cost applied to production, $42,000. Required: 1. Prepare journal entries to record the costs incurred in both the Refining Department and Blonding Department during March Key your entries to the tems (a) through below. a Raw materials used in production b Director costs incurred. Manufacturing overhead costs incurred for the entire factory, $225.000. (Credit Accounts Payable.) d. Manufacturing overhead was applied to production using a predetermined overhead rate. c. Units that were complete with respect to processing in the Refining Department were transferred to the Blending Department $740000 Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $950,000 Completed units were sold on account, $1,500,000. The Cost of Goods Sold was $900,000 2. Post the journal entries from above to 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 account shown above) Work in pross-landing Department 565,000

Answer 1

0 Transaction General Journal as work in Process-Refining Department & 495,000 work in Process-Blending Department & 115,000 Raw materials (To record issuance of raw mater $610,000 b. Work in Process - Refining Department & 72,000 Work in Process - Blending Department & 18,000 Salaries and wages Payable To record direct labor cost incurred) $ 90,000 C. $ 225,000 Manufacturing overhead Accounts Payable (To record manufacturing overhead) $225,000 do & 181,000 $ 181,000 work in Process - Refining Department Manufacturing overhead (To record overhead cost applied) $ 42,000 d.(2) work in proces - Blending Department $ 42,000 Manufacturing overhead to record overhead lost applied & 740,000 Twork in Process - Blending Department work in Process - Refining Department To record transfer of semifinished units) $ 740,000

I finished Goods work in Process-Blending Department (To record transfer of completed units $950,000 $ 950, ODD gy $1,500,000 Accounts Receivable Sales (To record sales on acconat) $1,500,000 912) $ 900,000 Cost of Goods sold finished Goods (To record cost of goods sold) $ 900,000 Accounts Receivable $1,500,000 Raw materials Begibal & 618,000 a $610,000 g) Endi bal & 8,000 work in process Refining Department Beg. Bal. $ 38,000 a) $495,000 e) $740,000 (6) $ 72,000 (d) $ 181,000 work in Process B.lending Department Begobal & 65,000 (a) & 115,000 W & 950,000 (6) $ 18,000 $ 42,000 (e) $ 740,000 End, Bal $ 46,000 Endibal, $ 30,000

finished Goods Begibal $ 20,000 ) $ 950,000 19 $900,000 Manufacturing overhead () $225,000 $223,000 End, bali $2,000 Endi bal & 70,000 Accounts Payable $ 225,000 Salaries and wages Payable 6 490,000 sales Cost of Goods sold 19) $ 900,000 9$1,500,000 Calculation: do Manufacturing overhead = Manufacturing overhead Refining Department & Manufacturing overhead Blending Department - $ 181,000 + $ 43,000 - $223,000