https lowconnect htm 4 0 Lubricants Inc produces a special k

https low/connect htm 4 0 Lubricants, Inc.. produces a special kind of grease that is widely used by race car drivers. The grease is departments-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 ,000Completed and transferred to Blending Materials 495,000 The March 1 work in process inventory in the Refining Department consists of the following elements $4,000, and overhead, $9,000 Costs incurred during March in the Blending Department were: materials used. $ $15,000 drect labor $18,00 and overhed cost Required the costs incured in both the Refining Department and Blending Department during March. Key 1. Prepare journal entries to record your entries to the items (a) through Ig) below a. Raw materials used in production b. Direct labor costs incurred C Manufacturing overhead costs incurred for the entire factory $225,000. (Credit Accounts Payable) overhead was applied to production using a predetermined overhead rate Blending Department that were complete with respect to processing in the Refining Department were transferred to the $740.000 t 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 account, $1500.000. The Cost of Goods Sold was $900,000 Prev 2 of 2EE Next re to search

Solution

1 Journal entries: debit $ credit $ a WIP 495000 Material 495000 b WIP 72000 DL payable 72000 c Manuf Overhead 225000 Accounts Payable 225000 d WIP 181000 Manuf Overhead 181000 e WIP- Blending department 740000 WIP - Refining Department 740000 f FG Inventory 950000 WIP- Blending department 950000 g AR 1500000 Sales revenue 1500000 COGS 900000 FG Inventory 900000 2 T-Accounts: RM account: OB 618000 WIP - refining 495000 cb 123000 WIP - Refining Deptt. Account: ob 38000 WIP - blending 740000 mat 495000 cb 46000 DL 72000 M O/H 181000 Total 786000 WIP - Blending Deptt. Account: ob 65000 FG Inventory 950000 Transferred in 740000 cb 30000 mat 115000 DL 18000 M O/H 42000 Total 980000