Lubricants, Inc., produces a special kind of grease that is widely used by race
ID: 2341228 • Letter: L
Question
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 Department March 1 balance 34,800 Completed and transferred to Blending Materials Direct labor Overhead March 31 balance 146,600 66,200 484,000 The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $9,000; direct labor, $4,700; and overhead, $21,100. Costs incurred during March in the Blending Department were: materials used, $44,000; direct labor, $16,200; and overhead cost applied to production, $107000. 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
Solution 1:
Solution 2:
Journal Entries - Lubricants Inc. Event Particulars Debit Credit a1 Work In Process - Refining Department Dr $146,600.00 To Raw Materials $146,600.00 (Being raw material used in production) a2 Work In Process - Blending Department Dr $44,000.00 To Raw Materials $44,000.00 (Being raw material used in production) b1 Work In Process - Refining Department Dr $66,200.00 To Cash $66,200.00 (To record direct labor cost incurred) b2 Work In Process - Blending Department Dr $16,200.00 To Cash $16,200.00 (To record direct labor cost incurred) c Manufacturing overhead Dr $686,000.00 To Accounts payable $686,000.00 (To record manufacturing overhead incurred) d1 Work In Process - Refining Department Dr $484,000.00 To Manufacturing overhead $484,000.00 (To record manufacturing overhead applied) d2 Work In Process - Blending Department Dr $107,000.00 To Manufacturing overhead $107,000.00 (To record manufacturing overhead applied) e Work In Process - Blending Department Dr $662,000.00 To Work In Process - Refining Department $662,000.00 (Being goods completed transferred to blending from refining) f Finished goods inventory Dr $760,000.00 To Work In Process - Blending Department $760,000.00 (Being goods completed transferred to finished goods) g1 Accounts receivables Dr $1,450,000.00 To Sales Revenue $1,450,000.00 (To record sales revenue) g2 Cost of goods sold Dr $670,000.00 To Finished goods inventory $670,000.00 (To record COGS)Related Questions
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