Kenworth Company uses a job-order costing system. Only three jobsJob 105, Job 106, and Job 107were worked on during November and December. Job 105 was completed on December 10; the other two jobs were still in production on December 31, the end of the company's operating year. Data from the job cost sheets of the three jobs follow:

Job Cost SheetJob 105Job 106Job 107November costs incurred:Direct materials$17,100$9,900$0Direct labour$13,600$7,600$0Manufacturing overhead$21,760$12,160$0December costs incurred:Direct materials$0$8,500$22,500Direct labour$4,450$6,300$10,600Manufacturing overhead???

The following additional information is available:

1. Manufacturing overhead is applied to jobs on the basis of direct labour cost.
2. Balances in the inventory accounts at November 30 were as follows:

Raw Materials$41,800Work in Process?Finished Goods$88,000

Required:

1.Prepare T-accounts for Raw Materials, Work in Process, Finished Goods, and Manufacturing Overhead. Enter the November 30 inventory balances given above; in the case of Work in Process, compute the November 30 balance and enter it into the Work in Process T-account.

2.Prepare journal entries forDecemberas follows:

a Derive entry to record the issue of materials into production and post the entry to appropriate T-accounts. (In the case of direct materials, it is not necessary to make a separate entry for each job.) Indirect materials used during December totalled $4,450.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b.Derive entry to record the incurrence of labour cost, and post the entry to appropriate T-accounts. (In the case of direct labour cost, it is not necessary to make a separate entry for each job.) Indirect labour cost totalled $8,600 for December.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

c.Derive entry to record the incurrence of $19,810 in various actual manufacturing overhead costs for December (credit Accounts Payable). Post this entry to the appropriate T-accounts.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

3-a.What apparent predetermined overhead rate does the company use to assign overhead cost to jobs?

3-b.Derive 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 T-accounts.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

4.As stated earlier, Job 105 was completed during December. Derive 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 T-accounts.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

5.Determine the balance at December 31 in the Work in Process inventory account. How much of this balance consists of costs charged to Job 106? Job 107?