Lubricants, Inc., produces a special kind of grease that is widely used by race
ID: 2420435 • 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: The following incomplete Work in Process account is available for the Refining Department for March: Work in Process—Refining Department March 1 balance 34,200 Completed and transferred to Blending ? Materials 154,600 Direct labor 74,200 Overhead 474,000 March 31 balance ? The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7,900; direct labor, $4,700; and overhead, $21,600. Costs incurred during March in the Blending Department were: materials used, $45,000; direct labor, $16,200; and overhead cost applied to production, $107,000.
Required:
1. Prepare journal entries to record the costs incurred in both the Refining Department and Blending Department during March. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. Raw materials were issued for use in production. b. Direct labor costs were incurred. c. Manufacturing overhead costs for the entire factory were incurred, $716,000. (Credit Accounts Payable.) d. Manufacturing overhead cost 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, $672,000. f. Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $750,000. g. Completed units were sold on account, $1,360,000. 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 Department’s Work in Process account is given on the prior page.)
Raw materials $ 208,600
Work in process—Blending Department $ 52,000
Finished goods $ 20,000
After posting the entries to the T-accounts, find the ending balance in the inventory accounts and the manufacturing overhead account.
Explanation / Answer
Journal Entries
a) Work in process- Refining Dr 154,600
Raw material - refining Dept. Cr 154,600
Work in process- Blending Dr 45,000
Raw material - Blending Dept Cr 45,000
b) Work in process- Refining Dr 74,200
Work in process - Blending Dr 16,200
Labor - Refining Dept. Cr 74,200
Labor - Blending Dept. Cr 16,200
c) Manfacturing Over head Dr 716,000
Accounts payable Cr 716,000
d) Work in process- Refining Dr 474,000
Work In process- Blending Dr 107,000
Mfg. Overhead- refining Cr 474,000
Mfg. Overhead- Blending Cr 107,000
e) Work in process- Blending Dr 672,000
Work In process - Refining Cr 672,000
f) Finished Goods Dr 750,000
Work In process - Blending Cr 750,000
g) Accounts receivable Dr 1,360,000
Sales Cr 1,360,000
h) Cost of goods sold Dr 600,000
Finished goods Cr 600,000
Note : Please 2 nd part separately by providing solution to 1st part as your part of question
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