value: 100 points Lubricants, Inc., produces a special kind of grease that is wi
ID: 2519221 • Letter: V
Question
value: 100 points 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 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 Completed and transferred to Blending March 1 balance Materials Direct labor 38.00 495,000 72,000 181,000 March 31 balance The March 1 work in process inventory in the Refining Department consists of the following elements materials, $25,000, direct labor, $4,000, and overhead, $9,000 $18,000, and overhead cost applied to production, $42,000 Required Costs incurred during March in the Blending Department were: materials used, $115,000; direct labor 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, $225,000 (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, $740,000 f Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $950,000 g Completed units were sold on accoun, $1,500,000. The Cost of Goods Sold was $900,000Explanation / Answer
1) Journal Entries
2)
Accounts receivable
Raw materials
Work in process Refining Department
work in process blending department
Finished goods
Manufacturing overhead
Accounts payable
salaries and wages payable
Sales
Cost of goods sold
Serial No. Particulars Debit ($) Credit($) a) Work in process a/c (Refining department) Dr 495,000 Work in process a/c(Blending department) Dr 115,000 To Raw Materials a/c (Raw materials being issued) 610,000 b) work in process a/c (refining dept) dr 72,000 work in process a/c (blending dept) dr 18,000 To Salaries and wages payable a/c (Being direct labour costs incurred) 90,000 c) Manufacturing overhead a/c dr 225,000 To accounts payable a/c (Being manufacturing overheads were incurred on credit) 225,000 d) Work in process a/c (refining dept) dr 181,000 Work in process a/c (blending dept) dr 42,000 To manufacturing overhead (Being manufacturing overheads are apportioned) 223,000 e) work in process a/c (blending dept) dr 740,000 To work in process a/c (refining dept) (Being units were transferred) 740,000 f) Finished goods a/c dr 950,000 To work in process a/c (blending dept) (Being transferred to finished goods) 950,000 g) Accounts receivable a/c dr 1,500,000 To sales a/c (Being sales done) 1,500,000 Cost of goods sold a/c dr 900,000 To finished goods a/c (Being cost of goods sold) 900,000Related Questions
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