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 $ 19,500 $ 16,000 $24,000 $12,300 $10,000 $15,000 $ $ $ 0 0 0 November costs incurred: Direct materials Direct labour Manufacturing overhead December costs incurred: Direct materials Direct labour Manufacturing overhead $ 0 $ 6,250 ? $ 9,700 $ 7,500 ? $27.300 $13,000 ? 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 $ 49,000 ? $100,000 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. Raw Materials Work in Process Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. 0 Finished Goods Manufacturing Overhead Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. 0 Salaries & Wages Payable Accounts Payable Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. 0 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 $6,250. (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 issue of materials into production and Indirect materials used during December totalled $6,250. 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 $11,000 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 Record the entry for actual manufacturing overhead costs for December. Note: Enter debits before credits. Event General Journal Debit Credit 1 3-a. What apparent predetermined overhead rate does the company use to assign overhead cost to jobs? Predetermined overhead rate % 3-6. 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 Journal entry worksheet 1 > Record the entry to record the application of overhead cost to jobs for December Note: Enter debits before credits. General Journal Debit Credit Event 1 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 Journal entry worksheet
