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Kenworth Company uses a job - order costing system. Only three jobs Job 1 0 5 , Job 1 0 6 , and Job 1
Kenworth Company uses a joborder costing system. Only three jobsJob Job and Job were worked on during November and December. Job was completed on December ; the other two jobs were still in production on December the end of the companys operating year. Data from the job cost sheets of the three jobs follow:
Job Cost Sheet
Job Job Job
November costs incurred:
Direct materials $ $ $
Direct labour $ $ $
Manufacturing overhead $ $ $
December costs incurred:
Direct materials $ $ $
Direct labour $ $ $
Manufacturing overhead
The following additional information is available:
Manufacturing overhead is applied to jobs on the basis of direct labour cost.
Balances in the inventory accounts at November were as follows:
Raw Materials $
Work in Process
Finished Goods $
Required:
Prepare Taccounts for Raw Materials, Work in Process, Finished Goods, and Manufacturing Overhead. Enter the November inventory balances given above; in the case of Work in Process, compute the November balance and enter it into the Work in Process Taccount.
Prepare journal entries for December as follows:
a Prepare an entry to record the issue of materials into production and post the entry to appropriate Taccounts. In the case of direct materials, it is not necessary to make a separate entry for each job. Indirect materials used during December totalled $If no entry is required for a transactionevent select No journal entry required" in the first account field.
b Prepare an entry to record the incurrence of labour cost, and post the entry to appropriate Taccounts. In the case of direct labour cost, it is not necessary to make a separate entry for each job. Indirect labour cost totalled $ for December. If no entry is required for a transactionevent select No journal entry required" in the first account field.
c Prepare an entry to record the incurrence of $ in various actual manufacturing overhead costs for December credit Accounts Payable Post this entry to the appropriate Taccounts. If no entry is required for a transactionevent select No journal entry required" in the first account field.
a What apparent predetermined overhead rate does the company use to assign overhead cost to jobs?
b Prepare a journal entry to record the application of overhead cost to jobs for December it is not necessary to make a separate entry for each job Post this entry to the appropriate Taccounts. If no entry is required for a transactionevent select No journal entry required" in the first account field.
As stated earlier, Job was completed during December. Prepare a journal entry to show the transfer of this job off the production line and into the finished goods warehouse. Post the entry to the appropriate Taccounts. If no entry is required for a transactionevent select No journal entry required" in the first account field.
Determine the balance at December in the Work in Process inventory account. How much of this balance consists of costs charged to Job Job
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