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

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. ng and Blending. Raw materials are introduced at The following incomplete Work in Process account is available for the Refining Department for March Work in Process-Refining Department Completed and transferred March 1 balance Materials Direct labor Overhead 31,600 147,600 80,200 474,000 to Blending March 31 balance The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7,100; direct labor, $3,600; and overhead, $20,900. Costs incurred during March in the Blending Department were: materials used, $44,000; direct labor, $16,900; and overhead cost applied to production, S

Explanation / Answer

S.NO. ACCOUNTS TITLES AND EXPLANATIONS DEBIT IN $ CREDIT IN $ 1 Work in process-Refining 147,600 Work in process- Blending 44,000     Raw material 191600 (for issue of material) 2 Work in process-Refining 80,200 Work in process- Blending 16,900      Wages payable 97100 (for wages incurred) 3 Manufacturing overheads Account Dr. 696,000     Accounts payable 696,000 (for overheads incurred) 4 Work in Process Inventory-Refining Dr. 474,000    Manufacturing overheads 474,000 (for overheads applied) 5 Work in Process Inventory-Blending Dr. 111,000    Manufacturing overheads 111,000 (for overheads applied) 6 Work in Process -Blending Dr. 652,000     Work in process-Refining 652,000 (for units transferred) 7 Finished Goods Inventory 710,000     Work in Process -Blending 710,000 (For transferring completed goods) 8 Accounts recievable Dr. 1,420,000    Sales revenue 1,420,000 (for goods sold) 9 Cost of Goods sold account Dr. 650,000      Finished Goods inventory 650,000 (for cost of goods sold)

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