Lubricants, Inc

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.


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.)

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