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 Work in Process-Refining Department 32,000 Completed and transferred to Blending 139,600 70,200 483,000 Materials Direct labor Overhead March 31 balance The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7,600; direct labor, $4,300; and overhead, $20,100. Costs incurred during March in the Blending Department were: materials used, $44,000; direct labor, $16,600; and overhead cost applied to production, $101,000. 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. a. Raw materials used in production. b. Direct labor costs incurred. U. TUV ULCIUIS USUI PIUUULLIUIT. 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, $622,000. f. Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $730,000. g. Completed units were sold on account, $1,360,000. The Cost of Goods Sold was $640,000. 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 $ 211,600 $ 51,000 $ 13,000 Required 1 Required 2 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet Credit No Transactions 1a. General Journal Work in process-Refining Department Raw materials Debit 148,600 148,600 Work in process-Refining Department Work in processBlending Department Salaries and wages payable 66,200 16,100 82,300 C. 696,000 Manufacturing overhead Accounts payable 696,000 4 d. Work in processRefining Department Work in processBlending Department 485,000 102,000 Work in processRefining Department Work in processBlending Department Manufacturing overhead 485,000 102,000 587,000 682,000 Work in processBlending Department Work in processRefining Department 682,000 730,000 Finished goods Work in process-Blending Department 730,000 7 9(1). Accounts receivable 143,000 Sales 143,000 g(2) 630,000 Cost of goods sold Finished goods 630,000 Post the journal entries from Requirement 1 to T-accounts...... Accounts Receivable Raw Materials Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. Work in Process-Refining Department Work in Process-Blending Department Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. ol Finished Goods Manufacturing Overhead Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. Accounts Payable Salaries and Wages Payable Beg. Bal. Beg. Bal. End. Bal. End. Bal. Sales Cost of Goods Sold Beg. Bal. Beg. Bal. End. Bal. End. Bal
