Question

35,000 138,600 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 Completed and transferred to Blending Materials Direct labor 69,200 Overhead 477,000 March 31 balance The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $8,400; direct labor, $4,800; and overhead, $21,800 Costs incurred during March in the Blending Department were materials used, $44,000; direct labor, $17,600; and overhead cost applied to production, $114,000. 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 (g) below. es a. Raw materials used in production b. Direct labor costs incurred. c. Manufacturing overhead costs incurred for the entire factory, $676,000. (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, $652,000 1. Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $770,000 9. Completed units were sold on account, $1,350,000. The Cost of Goods Sold was $610,000,

Answer 1

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Sr. No a. Account title and Explanation Work in Process - Refining Dept Work in Process - Blending Dept Raw Materials Debit Credit 138600 44000 182600 b. Work in Process - Refining Dept Work in Process - Blending Dept Salaries and Wages Payable 69200 17600 86800 C. 676000 Manufacturing Overhead Accounts Payable 676000 d. Work in Process - Refining Dept Work in Process - Blending Dept Manufacturing Overhead 477000 114000 591000 e. 652000 Work in Process - Blending Dept Work in Process - Refining Dept 652000 f. 770000 Finish goods Work in Process - Blending Dept 770000 8 1350000 Accounts Recivable Sales 1350000 610000 Cost of Goods Sold Finished Goods 610000