Lubricants, Inc., produces a special kind of grease that is widely used by race
ID: 2422098 • 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:
The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7,600; direct labor, $4,500; and overhead, $21,400.
Costs incurred during March in the Blending Department were: materials used, $46,000; direct labor, $17,900; and overhead cost applied to production, $107,000.
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.)
Manufacturing overhead costs for the entire factory were incurred, $706,000. (Credit Accounts Payable.)
Units that were complete with respect to processing in the Refining Department were transferred to the Blending Department, $642,000.
Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $740,000.
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.)
After posting the entries to the T-accounts, find the ending balance in the inventory accounts and the manufacturing overhead account.
PLEASE BE CLEAR ON ALL T ACCOUNTS AND ALL THE JOURNAL ENTRIES
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:
Explanation / Answer
Raw Material Inventory Dr Cr
March 1 Balance b/f 208,600
------------
208600
WIP-Refining department 146600
WIP-Blending department 46000
Ending Balance 16000
208600
Work in Process-Refining
Dr Cr
March 1 Balance b/f 33500
Raw material 46 600 Salaries & Wages payable 65200
Manufacturing OH 480000
725300
March 31 WIP-Blending 642000
Ending balance 83300
725300
Work in Process-Blending department
Dr Cr
March Balance b/f 51000
Raw Material 46000
Salaries & Wages payable 17900
Manufacturing OH 107000
Transfer from WIP-Refining 642000
863900
March 31 Finished Goods 740000
Ending balance 123900
863900
Finished Goods
Dr Cr
March 1 Balance b/f 27000
Transfer from Blending 740000
767000
Cost of Goods Sold 620000
Ending Balance 147000
767000
Manufacturing Overhead
Dr Cr
Accounts payable 706000
_______
706000
WIP-Refining 480000
WIP-Blending 107000
Ending Balance 119000
706000
Date Account Titles & Explanations Debit Credit a work in process-refining department 146600 work in process-blending department 46000 Raw materials 192600 (raw materials issued for production) b work in process-refining department 65200 work in process-blending department 17900 salaries & wages payable 83100 (direct labour costs incurred) c manufacturing overhead 706000 accounts payable 706000 (overheads incurred for the factory) d work in process-refining department 480000 work in process-blending department 107000 manufacturing overhead 587000 (overhead applied at predetermined rate) e work in process-blending department 642000 work in process-refining department 642000 (transfer of units on completion) f finished goods 740000 blending department 740000 g cost of goods sold 620000 finished goods 620000 (COGS of goods sold)Related Questions
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