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 Sheet Job 105 Job 106 Job 107 $ 19,900 $ 12,700 $ $ 16,400 $ 10,400 $ $ 24,600 $ 15,600 $ 0 0 0 November costs incurred: Direct materials Direct labour Manufacturing overhead December costs incurred: Direct materials Direct labour Manufacturing overhead $ 0 $ 9,900 $28,100 $ 6,550 $ 7,700 $ 13,400 ? ? ? The following additional information is available: a. Manufacturing overhead is applied to jobs on the basis of direct labour cost. b. Balances in the inventory accounts at November 30 were as follows: Raw Materials Work in Process Finished Goods $ 50, 200 ? $102,000 2. 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 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 $6,550. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the issue of materials into production and Indirect materials used during December totalled $6,550. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general journal b. Prepare an 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 $11,400 for December. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 > Record the incurrence of labour cost and Indirect labour cost totalled $11,400. Note: Enter debits before credits Event General Journal Debit Credit 1 Record entry Clear entry View general Journal c. Prepare an entry to record the incurrence of $20,825 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.) View transaction list View journal entry worksheet No Event General Journal Debit Credit 1 1 Manufacturing overhead Accounts payable 3-a. What apparent predetermined overhead rate does the company use to assign overhead cost to jobs? Predetermined overhead rate 150% 3-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 T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Event General Journal Debit Credit 1 1 Work in process Manufacturing overhead 4. As stated earlier, Job 105 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 T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Event General Journal Debit Credit 1 1 Finished goods Work in process 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? Job 106 Job 107 Total Direct materials Direct labour Manufacturing overhead Total cost $ 0 $ 0 $ 0
