Lubricants Inc produces a special kind of grease that is wid

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 Departrment. The following incomplete Work in Process account is available for the Refining Department for March: Hork in Process Refinin March 1 balance 33,000Completed and tranaferred to Blending Materials Direct labor Overhead March 31 balance 150,600 82,200 476, 000 The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $8,000; direct labor, $4,400; and overhead, $20,600. Costs incurred during March in the Blending Department were: materials used, $45,000; direct labor, $17,500; and overhead cost applied to production, $108,000. 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. a. Raw materials used in production b. Direct labor costs incurred. c. Manufacturing overhead costs incurred for the entire factory, $656,000. (Credit Accounts Payable.) d. Manufacturing overhead 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, $780,000. g. Completed units were sold on account, $1,480,000. The Cost of Goods Sold was $640,000. 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 is given in the T-account shown above.) Nork in Finished goods $ 209,600 Department 55,000 $ 23,000 Complete this question by entering your answers i n the tabs below RequiredRequired 2

Solution

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No.	Account Titles and Explanation	Debit	Credit
a.	Work in process-Refining department	150600
	Work in process-Blending department	45000
	Raw Materials inventory		195600
	(To record direct materials used in production)
b.	Work in process-Refining department	82200
	Work in process-Blending department	17500
	Wages payable		99700
	(To record direct labor costs incurred)
c.	Manufacturing overhead	656000
	Accounts Payable		656000
	(To record manufacturing overhead incurred)
d.	Work in process-Refining department	476000
	Work in process-Blending department	108000
	Manufacturing overhead		584000
	(To record manufacturing overhead applied)
e.	Work in process-Blending department	672000
	Work in process-Refining department		672000
	(To record transfers from Refining to Blending department)
f.	Finished goods inventory	780000
	Work in process-Blending department		780000
	(To record goods completed and transferred to finished goods)
g.	Accounts receivable	1480000
	Sales revenue		1480000
	(To record sales on account)
	Cost of goods sold	640000
	Finished goods inventory		640000
	(To record cost of sales)