Problem 5-21 T-Accounts; Overhead Rates; Journal Entries [LO3, LO4, LO5, LO7]

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 $ 20,100 $ 12,900 $ 0
Direct labour $ 16,600 $ 10,600 $ 0
Manufacturing overhead $ 24,900 $ 15,900 $ 0
December costs incurred:
Direct materials $ 0 $ 10,000 $ 28,500
Direct labour $ 6,700 $ 7,800 $ 13,600
Manufacturing overhead ? ? ?
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 $ 50,800
Work in Process ?
Finished Goods $ 103,000

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 for December as follows:

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 $6,700. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)