In a process operation, the direct labor of a production department includes:
a. All labor used exclusively by that department, but only if the labor is applied to the product itself.
b. All labor used exclusively by that department, even if the labor is not applied to the product itself.
c. Only labor that helps more than one production department, such as clerical, repair, and computer technicians.
d. All labor for that department, including labor for services that help more than one production department, such as clerical, repair, and computer technicians.
e. Only labor that relates to goods finished during the period.
In a process operation, the direct labor of a production department includes:
a. All labor used exclusively by that department, but only if the labor is applied to the product itself.
b. All labor used exclusively by that department, even if the labor is not applied to the product itself.
c. Only labor that helps more than one production department, such as clerical, repair, and computer technicians.
d. All labor for that department, including labor for services that help more than one production department, such as clerical, repair, and computer technicians.
e. Only labor that relates to goods finished during the period.
Related questions
Lubricants, Inc., produces a special kind of grease that iswidely used by race car drivers. The grease is produced in twoprocessing departments: |
The following incompleteWork in Process account is available for the Refining Departmentfor March: |
| Work in ProcessâRefining Department |
| March 1 balance | 33,500 | Completed andtransferred to Blending | ? | |
| Materials | 146,600 | |||
| Direct labor | 65,200 | |||
| Overhead | 480,000 | |||
| March 31balance | ? | |||
The March 1 work in processinventory in the Refining Department consists of the followingelements: materials, $7,600; direct labor, $4,500; and overhead,$21,400. |
Costs incurred during March in theBlending Department were: materials used, $46,000; direct labor,$17,900; and overhead cost applied to production, $107,000. |
| Required: |
| 1. | Prepare journal entries to record the costs incurred in both theRefining Department and Blending Department during March.(If no entry is required for a transaction/event, select"No journal entry required" in the first accountfield.) |
| a. | Raw materials were issued foruse in production. |
| b. | Direct labor costs wereincurred. |
| c. | Manufacturing overhead costs for the entire factory wereincurred, $706,000. (Credit Accounts Payable.) |
| d. | Manufacturing overhead cost wasapplied to production using a predetermined overhead rate. |
| e. | Units that were complete with respect to processing in theRefining Department were transferred to the Blending Department,$642,000. |
| f. | Units that were complete with respect to processing in theBlending Department were transferred to Finished Goods,$740,000. |
| g. | Completed units were sold onaccount, $1,430,000. The Cost of Goods Sold was $620,000. |
| 2. | Post the journal entries from (1) above to T-accounts. Thefollowing account balances existed at the beginning of March. (Thebeginning balance in the Refining Departmentâs Work in Processaccount is given on the prior page.) |
| Raw materials | $ | 208,600 |
| Work inprocessâBlending Department | $ | 51,000 |
| Finished goods | $ | 27,000 |
| After posting the entries to the T-accounts, find the endingbalance in the inventory accounts and the manufacturing overheadaccount. PLEASE BE CLEAR ON ALL T ACCOUNTS AND ALL THE JOURNALENTRIES |
Lubricants, Inc., produces a special kind of grease that iswidely used by race car drivers. The grease is produced in twoprocessing departments: Refining and Blending. Raw materials areintroduced at various points in the Refining Department. |
The following incompleteWork in Process account is available for the Refining Departmentfor March: |
| Work in ProcessâRefining Department |
| March 1 balance | 34,300 | Completed andtransferred to Blending | ? | |
| Materials | 156,600 | |||
| Direct labor | 65,200 | |||
| Overhead | 487,000 | |||
| March 31balance | ? | |||
The March 1 work in processinventory in the Refining Department consists of the followingelements: materials, $8,900; direct labor, $3,900; and overhead,$21,500. |
Costs incurred during March in theBlending Department were: materials used, $46,000; direct labor,$17,800; and overhead cost applied to production, $116,000. |
| Required: |
| 1. | Prepare journal entries to record the costs incurred in both theRefining Department and Blending Department during March.(If no entry is required for a transaction/event, select"No journal entry required" in the first accountfield.) |
| a. | Raw materials were issued foruse in production. | ||||||||||||||||
| b. | Direct labor costs wereincurred. | ||||||||||||||||
| c. | Manufacturing overhead costs for the entire factory wereincurred, $686,000. (Credit Accounts Payable.) | ||||||||||||||||
| d. | Manufacturing overhead cost wasapplied to production using a predetermined overhead rate. | ||||||||||||||||
| e. | Units that were complete with respect to processing in theRefining Department were transferred to the Blending Department,$662,000. | ||||||||||||||||
| f. | Units that were complete with respect to processing in theBlending Department were transferred to Finished Goods,$800,000. | ||||||||||||||||
| g. | Completed units were sold on account, $1,380,000. The Cost ofGoods Sold was $610,000.
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