Question
The following incomplete Work in Process account is available for the Refining Department for March: Work in ProcessRefining Department March 1 balance 33,300 Completed and
The following incomplete Work in Process account is available for the Refining Department for March:
Work in ProcessRefining Department | |||
March 1 balance | 33,300 | Completed and transferred to Blending | ? |
Materials | 154,600 | ||
Direct labor | 65,200 | ||
Overhead | 480,000 | ||
March 31 balance | ? |
The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $8,200; direct labor, $3,500; and overhead, $21,600.
Costs incurred during March in the Blending Department were: materials used, $44,000; direct labor, $16,800; 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.
- Raw materials used in production.
- Direct labor costs incurred.
- Manufacturing overhead costs incurred for the entire factory, $666,000. (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, $662,000.
- 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, $1,310,000. The Cost of Goods Sold was $600,000.
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 | $ | 212,600 |
Work in processBlending Department | $ | 55,000 |
Finished goods | $ | 10,000 |
Post the journal entries from Requirement 1 to T-accounts.
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