Kenworth Company uses a joborder costing system Only three j

Kenworth Company uses a job-order costing system. Only three jobs-Job 105, Job 106, and Job 107 were 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 November costs incurred Direct materials Direct labour Manufacturing overhead $16,700 $ 9,500 0 $13,200 7,200 0 $21,120 $11,520 0 December costs incurred $08,300 $21,700 Direct materials Direct labour Manufacturing overhead $ 4,150 $ 6,100 $10,200 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 $40,600 $86,000 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 40,600 Beg. Bal End. Bal 40,600 End. Bal 0 Finished Goods Manufacturing Overhead Beg. Bal Beg. Bal End. Bal End. Bal

Solution

1. Work in process on Nov. 30 = $16700 + $13200 + $21120 + $9500 + $7200 + $11520 = $79240

2.

3-a. Predetermined overhead rate = $21120/$13200 = 160% of direct labor cost

3-b.

4.

Cost of Job 105 completed and transferred to finished goods = $16700 + $13200 + $21120 + $4150 + (160% x $4150) = $61810

5.

Raw Materials		Work in Process
Beg. Bal.	40600	34150	a.		Beg. Bal.	79240	61810	4
					a.	30000
					b.	20450
					3-b.	32720
End. Bal.	6450
					End. Bal.	100600
Finished Goods		Manufacturing Overhead
Beg. Bal.	86000				Beg. Bal.	0	32720	3-b.
4	61810				a.	4150
					b.	8200
					c.	19270
End. Bal.	147810
					End. Bal.		1100
Salaries & Wages Payable		Accounts Payable
Beg. Bal.		0			Beg. Bal.		0
		28650	b.				19270	c.
End. Bal.		28650			End. Bal.		19270