Lubricants, Inc., produces a special kind of grease that is widely used by race

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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 Departeent March 1 balance 34,209 Completed and transferred to Blending Materials Direct labor Overhead March 31 balance 148,600 1,280 479,000 The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $9,000; direct labor, $3,700; and overhead, $21,500. Costs incurred during March in the Blending Department were: materials used, $44,000, direct labor, $16,800, and overhead cost applied to production, $117,000. 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

Explanation / Answer

Ans.1

Ans.2

Transactions General Journal Debit ($) Credit($) A. WIP - Refining Department 148,600 WIP- Blending Department 44,000 To Raw Materials 192,600 B. WIP- Refining Dept. 71,200 WIP- Blending Dept. 16,800 To Salaries $ Wages Payable 88,000 C. Manufacturing Overhead 706,000 To Accounts Payable 706,000 D-1 WIP- Refining Dept. 479,000 To Manufacturing Overhead 479,000 D-2 WIP- Blending Dept. 117,000 Manufacturing overhead 117,000 E. WIP- Blending Dept. 672,000 To WIP- Refining Dept. 672,000 F. Finished Goods 760,000 To WIP- Blending Dept. 760,000 G-1 Accounts Receivable 1 ,390,000 To Sales 1,390,000 G-2 Cost of Goods Sold 680,000 To Finished Goods 680,000

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