Lubricants, Incorporated, produces a special kind of grease 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

Debit Credit

March $1$ balance $38,000$ Completed and transferred to Blending $?$question mark

Materials $495,000$

Direct labor $72,000$

Overhead $181,000$

March $31$ balance $?$question mark

The March $1$ work in process inventory in the Refining Department includes materials, $$25,000$; direct labor, $$4,000$; and overhead, $$9,000.$

Costs incurred during March in the Blending Department were materials used, $$115,000$; direct labor, $$18,000$; and overhead cost applied to production, $$42,000.$

Required:

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.

Raw materials used in production.

Direct labor costs incurred.

Manufacturing overhead costs incurred for the entire factory, $$225,000.($Credit Accounts Payable.$)$

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

Units completed in the Refining Department were transferred to the Blending Department, $$740,000.$

Units completed in the Blending Department were transferred to Finished Goods, $$950,000.$

Completed units were sold on account, $$1,500,000.$ The Cost of Goods Sold was $$900,000.$

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.$)$

Raw materials $ $618,000$

Work in process$$Blending Department $ $65,000$

Finished goods $ $20,000$

Answer rating: 100% (QA)

Here are the journal entries to record the costs incurred in both the Refining Department and Blending Department during March a Raw materials used in ... View the full answer