Reference no: EM131536178

Assignment

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.

The following incomplete Work in Process account is available for the Refining Department for March:

Work in Process-Refining Department
March 1 balance	32,600	Completed and transferred to Blending	?
Materials	145,600
Direct labor	75,200
Overhead	473,000
March 31 balance	?

The March 1 work in process inventory in the Refining Department consists of the following elements: materials, $7,500; direct labor, $3,700; and overhead, $21,400.

Costs incurred during March in the Blending Department were: materials used, $45,000; direct labor, $17,300; 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Manufacturing overhead costs incurred for the entire factory, $646,000. (Credit Accounts Payable.)

Manufacturing overhead was applied to production using a predetermined overhead rate.

Units that were complete with respect to processing in the Refining Department were transferred to the Blending Department, $632,000.

Units that were complete with respect to processing in the Blending Department were transferred to Finished Goods, $730,000.

Completed units were sold on account, $1,330,000. The Cost of Goods Sold was $590,000.

Raw materials	$ 205,600
Work in process-Blending Department	$ 40,000
Finished goods	$ 29,000

2. Post the journal entries 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.)