Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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:

image text in transcribed

The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $8,500; direct labor, $4,500; and overhead, $19,800.

Costs incurred during March in the Blending Department were: materials used, $45,000; direct labor, $17,700; and overhead cost applied to production, $108,000.

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.

c. Manufacturing overhead costs incurred for the entire factory, $646,000. (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, $632,000.

f. Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $780,000.

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

image text in transcribed

March 1 balance Work in Process-Refining Department 32,800 Completed and transferred to Blending 145,600 77,200 484,000 Materials Direct labor Overhead March 31 balance Raw materials Work in process-Blending Department Finished goods $ 211,600 $ 40,000 $ 14,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

How To Audit Learn How To Become An Auditor

Authors: Mireya Knolton

1st Edition

B097KPLYBF, 979-8524922564

More Books

Students also viewed these Accounting questions