Lubricants, Inc., produces a special kind of grease that is widely used by race car drivers. The grease is produced in two processing departmentsRefining 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 ProcessRefining Department
March 1 balance	33,000	Completed and transferred to Blending	?
Materials	140,600
Direct labor	69,200
Overhead	481,000
March 31 balance	?

The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7,300; direct labor, $4,800; and overhead, $20,900.

Costs incurred during March in the Blending Department were: materials used, $45,000; direct labor, $17,300; and overhead cost applied to production, $106,000.

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.

Raw materials used in production.

Direct labor costs incurred.

Manufacturing overhead costs incurred for the entire factory, $696,000. (Credit Accounts Payable.)

Manufacturing overhead was applied to production using a predetermined overhead rate.

Units that were complete with respect to processing in the Refining Department were transferred to the Blending Department, $622,000.

Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $750,000.

Completed units were sold on account, $1,330,000. The Cost of Goods Sold was $650,000.

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 Departments Work in Process is given in the T-account shown above.)

Raw materials	$	209,600
Work in processBlending Department	$	42,000
Finished goods	$	18,000

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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

Note: Enter debits before credits.

Transactions	General Journal	Debit	Credit
a.

2). Record direct labor cost incurred for Refining and Blending department. Note: Enter debits before credits.

Transactions	General Journal	Debit	Credit
b.

3). Record manufacturing expenses incurred for the whole factory. Note: Enter debits before credits.

Transactions	General Journal	Debit	Credit
c.

4). Record entry to apply overhead cost to production at the predetermined rate to the Refining department and Blending department. Note: Enter debits before credits.

Transactions	General Journal	Debit	Credit
d.

5). Record transfer of semi finished goods from Refining to Blending department. Note: Enter debits before credits.

Transactions	General Journal	Debit	Credit
e.

6). Record the transfer of completed units from the Blending department to finished goods. Note: Enter debits before credits.

Transactions	General Journal	Debit	Credit
f.

7). Record sales on account. Note: Enter debits before credits.

Transactions	General Journal	Debit	Credit
g(1).

8). Record cost of goods sold. Note: Enter debits before credits.

Transactions	General Journal	Debit	Credit
g(1).

Part 2). Post the journal entries from Requirement 1 to T-accounts.

Accounts Receivable					Raw Materials
Beg. Bal.					Beg. Bal.
End. Bal.	0				End. Bal.	0
Work in ProcessRefining Department					Work in ProcessBlending Department
Beg. Bal.					Beg. Bal.
End. Bal.	0				End. Bal.	0
Finished Goods					Manufacturing Overhead
Beg. Bal.					Beg. Bal.
End. Bal.	0	0			End. Bal.		0
Accounts Payable					Salaries and Wages Payable
Beg. Bal.					Beg. Bal.
End. Bal.		0			End. Bal.		0
Sales					Cost of Goods Sold
Beg. Bal.					Beg. Bal.
End. Bal.		0			End. Bal.		0